VISHAY INTERTECHNOLOGY, INC.
A N N U A L R E P O R T 2 0 2 3
FROM THE EXECUTIVE CHAIRMAN
In 2023, with the appointment of Joel Smejkal and a new executive leadership
team, Vishay entered the next chapter in its 60+ year history. After a period
of financial stewardship, the Board took the necessary steps to reorient the
organization toward profitable growth. Under Joel’s leadership, Vishay has
embarked on a multi-year plan to invest $1.2 billion in expanding capacity
and in next-generation technologies. The goal of these investments is to
position Vishay to capitalize on the megatrends in e-mobility, sustainability,
and connectivity.
In its first year at the helm, the executive leadership team has already
accomplished a great deal and cultural change is evident across the organization.
Vishay has:
• Increased capacity
• Opened two new facilities
• Advanced expansion projects
• Engaged with customers
• Invested in innovation
Vishay is becoming a company that puts customers first and makes business-minded decisions,
moving away from its production-focused past. With these changes, Vishay is now focused on
growth and profitability.
On behalf of the Board of Directors, I want to express my steadfast commitment to deploying
Vishay’s strong balance sheet to invest in our multi-year plans, and support for the strategic
shift underway. I am confident that Joel and the executive leadership team will deliver enhanced
stockholder value over time while continuing to maintain cash available for our Stockholder
Return Policy.
Executive Chairman of the Board of Directors
Marc Zandman
Vishay Intertechnology, Inc.
2
FROM THE PRESIDENT & CEO
It’s been a remarkable year of change at Vishay as we began to implement our strategy
to become a customer-first, business-minded, and growth-oriented company. Across
the company, we are reshaping our operations, sales, marketing, finance, and human
resources. We invested in capacity expansion to be proactive and to meet the
demand of our customers in the coming upturn. It is this customer-focused
and business-minded approach that is creating a new Vishay.
During 2023, we implemented and made significant progress on multiple initiatives
to set the stage for faster revenue growth, margin expansion, and enhanced returns.
A top priority was to start adding incremental capacity, both internally and externally, to
support our highest growth and highest margin product lines to be ready to
capitalize on the megatrends of e-mobility, sustainability, and connectivity.
We increased annualized capacity by about 13%, particularly for power inductors, resistors, and
capacitors, as much of our 2022 capital expenditures came online. Internally, we invested $329 million
in capex, about two-thirds of which was spent on expansion projects.
These expansion projects included:
• Semiconductor wafer fabs located in Itzehoe, Taipei, and Turin, to meet the
growing long term demand from our automotive and industrial customers
• A facility in La Laguna Mexico, which we opened in the fourth quarter of 2023. This site’s initial
focus is to manufacture power inductors. We plan to establish a campus at the La Laguna
facility to bring together product lines from other Vishay business segments
• An expansion in Juarez, Mexico, which increases the manufacturing capacity for
our Power Metal Strip® resistors
In parallel to the construction of our new 12-inch MOSFET fab in Itzehoe, Germany, we took additional
steps to bridge the lack of capacity in MOSFETs for our automotive and industrial customers. These
steps included expanding our supply agreements with two of our existing foundry partners to gain more
wafer capacity as well as signing a long term supply agreement with SK keyfoundry to supply wafers for
multiple power MOSFET products.
A TOP PRIORITY WAS TO START ADDING
INCREMENTAL CAPACITY, both internally and externally, to
support our highest growth and highest margin product lines to be ready to capitalize
on the megatrends of e-mobility, sustainability, and connectivity.
2023 Annual Report
3
FROM THE PRESIDENT & CEO
To create available internal capacity for our high growth and high return products, we began to implement
subcontractor initiatives to outsource production of some commodity products. By year-end, we had qualified
fourteen different product families of resistors and inductors, bringing on additional capacity to support a widening
of our portfolio.
In terms of product innovation, another priority was to advance our silicon carbide capabilities.
Following the October 2022 acquisition of MaxPower, we advanced the development of our silicon carbide
technology, releasing samples of our 1200 V planar technology MOSFETs while continuing to work on the
1200 V dual Trench technology, the 1700 V planar technology, and the 650 V planar technology.
The next step toward commercialization of silicon carbide MOSFETs and diodes was acquiring the Newport wafer
fab in March 2024 for $177 million in cash. With Newport, we will add an automotive qualified, 8-inch semiconductor
fab located in the heart of a compound semiconductor cluster in South Wales, UK. At Newport, we plan to develop
and scale our silicon carbide capabilities and to develop our GaN technology.
We launched our strategy to enhance channel management and maximize the profitability of each channel.
As an example, we are better positioning Vishay by adding part numbers on the shelves of our distributors, a
channel we underserved for many years due to capacity constraints. With capacity increasing, we are in a position
to assure our presence on the shelf even during market upturns. Each of our business units is actively engaged with
our distribution partners in each region to identify a broader part number mix by technology.
We started to introduce Vishay solutions, leveraging our broad portfolio of discrete semiconductors and passives.
During the year, we released automotive reference designs for customer engineers to evaluate. The first solutions
were a high voltage intelligent battery sensor; a 48 V eFuse; and a 12 V / 48 V DC/DC converter.
In closing, a strategic shift that involves all business functions, global operations, and thousands of employees
energizes the organization and brings a cultural change. I want to express my deepest appreciation to all the Vishay
employees for their enthusiasm about the new Vishay and their energy and commitment to creating a bright future
for the company and themselves.
The culture of putting the customer first has taken hold. Customers are excited about the actions of the new Vishay.
We engage the OEMs, EMS, and distribution partners on a more frequent basis because we are successfully
investing in incremental capacity to help them scale. We are becoming a business-minded organization, making
decisions based on customer needs and market dynamics. We are collectively looking forward to capturing the
opportunities created by the megatrends of e-mobility, sustainability, and connectivity to drive faster revenue
growth and higher returns.
President and CEO
Joel Smejkal
4 Vishay Intertechnology, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒☒☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-7416
Vishay Intertechnology, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
38-1686453
(IRS employer identification no.)
63 Lancaster Avenue
Malvern, Pennsylvania 19355-2143
(Address of principal executive offices)
(610) 644-1300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common stock, par value $0.10 per share
Trading symbol
VSH
Name of exchange on which registered
New York Stock Exchange LLC
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒☒☒☒ No ☐
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒☒☒☒
Note – Checking the box above will not relieve any registrant required to file reports under Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒☒☒☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒☒☒☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large
accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒☒☒☒ Accelerated filer
☐ Smaller reporting company
Emerging growth company
☐
☐☐☐☐
☐☐☐☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of
the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐☐☐☐ No ☒☒☒☒
The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most
recently completed second fiscal quarter ($29.40 on July 1, 2023), assuming conversion of all of its Class B common stock held by non-affiliates into common stock of the registrant, was $3,764,000,000.
There is no non-voting stock outstanding.
As of February 14, 2024, registrant had 125,408,100 shares of its common stock (excluding treasury stock) and 12,097,148 shares of its Class B common stock outstanding.
Portions of the registrant’s definitive proxy statement, which will be filed within 120 days of December 31, 2023, are incorporated by reference into Part III.
DOCUMENTS INCORPORATED BY REFERENCE
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Vishay Intertechnology, Inc.
Form 10-K for the year ended December 31, 2023
CONTENTS
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Information About Our Executive Officers
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
SIGNATURES
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2022, and 2021
Notes to the Consolidated Financial Statements
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3
Item 1.
BUSINESS
Our Business
PART I
Vishay Intertechnology, Inc. (“Vishay,” the “Company,” “we,” “us,” or “our”) manufactures one of the world’s largest portfolios of discrete semiconductors and
passive electronic components that support innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and
medical markets. Serving customers worldwide, Vishay brands itself as The DNA of tech.™
Semiconductors include MOSFETs, diodes, and optoelectronic components. Passive components include resistors, inductors, and capacitors. Our semiconductor
components are used for a wide variety of functions, including power control, power conversion, power management, signal switching, signal routing, signal
blocking, signal amplification, two-way data transfer, one-way remote control, and circuit isolation. Our passive components are used to restrict current flow,
suppress voltage increases, store and discharge energy, control alternating current (“AC”) and voltage, filter out unwanted electrical signals, and perform other
functions.
The Vishay Story
For over six decades we have been building what we call The DNA of tech.TM
The Vishay journey began with one man, the late Dr. Felix Zandman, and a revolutionary technology. In the 1950’s, Dr. Felix Zandman was issued patents for his
PhotoStress® coatings and instruments, used to reveal and measure the distribution of stresses in structures such as airplanes and cars under live load conditions.
His research in this area led him to develop Bulk Metal® foil resistors – ultra-precise, ultra-stable resistors with performance exceeding any other resistor available
to date.
In 1962, Dr. Zandman, with a loan from the late Alfred P. Slaner, founded Vishay to develop and manufacture Bulk Metal foil resistors. Concurrently, J.E. Starr
developed foil resistance strain gages, which also became part of Vishay. Throughout the 1960’s and 1970’s, Vishay established itself as a technical and market
leader in foil resistors, PhotoStress products, and strain gages.
From that beginning, we grew and strengthened our business both organically and through strategic passive component acquisitions beginning in 1985 and
semiconductor acquisitions beginning in the late 1990’s. From discrete semiconductors to passive components; from the smallest diode to the most powerful
capacitor, Vishay manufactures a breadth of products which we call The DNA of tech.™
Through R&D, manufacturing, engineering, quality, sales and marketing, we generate a variety of components that support inventors and innovators creating new
generations of products spanning many sectors: automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical.
Together with major manufacturers of electronic products worldwide, we are supporting next level automation in multiple areas, including factories, the
electrification of the automobile, 5G network technology, and the rapid expansion of connectivity across everything (IoT).
We continue to implement Dr. Zandman’s vision, strategy, and culture as we work tirelessly to enhance value for our stockholders.
Vishay was incorporated in Delaware in 1962 and maintains its principal executive offices at 63 Lancaster Avenue, Malvern, Pennsylvania 19355-2143. Our
telephone number is (610) 644-1300.
4
Our Competitive Strengths
Global Technology Leader
As industry evolves, The DNA of tech™ evolves. We were founded based on the inventions of Dr. Felix Zandman and we continue to emphasize technological
innovation as a driver of growth. Many of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, and
developed by Dr. Zandman, our engineers, and our scientists. Our components today are smaller, faster, and more reliable than in the past, helping our customers
to be more inventive and evolve their businesses. Our components are used by virtually all major manufacturers of electronic products worldwide in the
automotive, industrial, computing, consumer, telecommunications, military and aerospace, and medical markets. They are found inside products and systems used
every day, from automobiles to airplanes, power grids, phones, and pacemakers. We are currently a worldwide technology and market leader in wirewound and
other power resistors, leaded film resistors, thin film SMD resistors, power inductors, wet and conformal-coated tantalum capacitors, capacitors for power
electronics, power rectifiers, low-voltage power MOSFETs, and infrared components.
Research and Development Provides Customer-Driven Growth Solutions
We maintain strategically placed application and product support centers where proximity to customers and our manufacturing locations enables us to more easily
gauge and satisfy the needs of local markets. The breadth of our product portfolio along with the proximity of our field application engineers to customers provides
increased opportunities to have our components selected and designed into new end products by customers in all relevant market segments. We also maintain
research and development personnel and promote programs at a number of our production facilities to develop new products and new applications of existing
products, and to improve manufacturing processes and technologies. We plan to grow our business and increase earnings per share, in part, through accelerating
the development of new products and technologies and increasing design-in opportunities by expanding our technical resources for providing solutions to
customers.
Operational Excellence
We are a leading manufacturer in our industry, with a broad product portfolio, access to a wide range of end markets and sales channels, and geographic diversity.
We have solid, well-established relationships with our customers and strong distribution channels. Our senior management team is highly experienced, with deep
industry knowledge. Over the past two decades, our management team has successfully restructured our company and integrated several acquisitions. We can
adapt our operations to changing economic conditions, as demonstrated by our ability to remain profitable and generate cash through the volatile economic cycle of
the recent past.
Broad Market Penetration
We have one of the broadest product lines of discrete semiconductors and passive components among our competitors. Our broad product portfolio allows us to
penetrate markets in all industry segments and all regions, which reduces our exposure to a particular end market or geographic location. We plan to grow our
business and increase earnings per share, in part, through improving market penetration by expanding manufacturing facilities for our most successful products,
increasing technical resources, and developing markets for specialty products in Asia. Over the next few years, we expect to experience higher growth rates than
over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure. See Note 15
to our consolidated financial statements for net revenues by region and end market.
Strong Track Record of Growth through Acquisitions
Since 1985, we have expanded our product line through various strategic acquisitions, growing from a small manufacturer of precision resistors and resistance strain
gages to one of the world’s largest manufacturers and suppliers of a broad line of electronic components. We have successfully integrated the acquired companies
within our existing management and operational structure, reducing selling, general, and administrative expenses through the integration or elimination of redundant
sales and administrative functions, creating manufacturing synergies, while improving customer service. We plan to grow our business and increase earnings per
share, in part, through targeted acquisitions. We have often targeted high margin niche business acquisitions. We also target strategic acquisitions of businesses
with technology and engineering capabilities that we can further develop and commercialize to grow our business and key niche suppliers that allow us to vertically
integrate our supply chain.
Strong Free Cash Flow Generation
We refer to the amount of cash generated from operations in excess of our capital expenditure needs and net of proceeds from the sale of assets as “free cash” (see
"Overview" included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for "free cash" definition and
reconciliation to generally accepted accounting principles ("GAAP")). Due to our strong operational management, cost control measures, efficient capital
expenditures, broad product portfolio, and strong market position, we have generated positive “free cash” in each of the past 27 years. Our aggressive capital
expenditure plans for 2023 - 2025 have limited and will limit "free cash" generation over that time frame.
Financial Strength and Flexibility
As of December 31, 2023, our cash and short-term investment balance exceeded our debt balance by $190.3 million. We also maintain a credit facility, which
provides a revolving commitment of up to $750 million through May 8, 2028, of which substantially all was available as of December 31, 2023. Our net cash
position and short-term investment balance, available revolving commitment, and “free cash” flow generation provide financial strength and flexibility and reduce our
exposure to future economic uncertainties.
5
Our Key Challenges
Economic Environment
Our business and operating results have been and will continue to be impacted by the global economy and the local economies in which our customers operate.
Our revenues are dependent on end markets that are impacted by fluctuating consumer and industrial demand, and our operating results can be adversely affected
by reduced demand in those markets.
Competition
Our business is highly competitive worldwide, with low transportation costs and few import barriers. Our major competitors, some of which are larger than us, have
significant financial resources and technological capabilities. To continue to grow our business successfully, we need to continually develop, introduce, and market
new and innovative products, modify existing products, respond to technological change, and customize certain products to meet customer requirements.
Continuous Innovation and Protection of Intellectual Property
Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been
awarded, have filed applications for, or have licenses to use numerous patents in the United States and other countries, there can be no assurance concerning the
degree of protection afforded by these patents or the likelihood that pending patents will be issued.
Continuing to Grow through Acquisitions
Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of growth through acquisitions. For this strategy to remain
successful, we need to continue to identify attractive and available acquisition candidates, complete acquisitions on favorable terms, and integrate new businesses,
manufacturing processes, employees, and logistical arrangements into our existing management and operating infrastructure.
Supply Chain Disruption
The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party contractors,
shipping partners, distributors, and end market customers. Our production and results of operations can be negatively impacted by disruptions to any part of the
supply chain, many of which are beyond our control. We remain cognizant of these challenges and seek to minimize their effects whenever possible. For a more
detailed discussion, see "Supply Chain" below.
For a more detailed discussion of the risks and uncertainties inherent in our business, which could materially and adversely affect our business, results of operations
or financial condition, see “Risk Factors” in Item 1A.
6
Key Business Strategies
Our business strategy principally consists of the following elements:
Think Customer First
We maintain significant production facilities in those regions where we market the bulk of our products in order to enhance the service and responsiveness that we
provide to our customers. We aim to further strengthen our relationships with customers and strategic partners by providing broad product lines that allow us to
provide “one-stop shop” service, whereby they can streamline their design and purchasing processes by ordering multiple types of products, by anticipating
customer needs, and supporting increasing customer demand.
Invest in Innovation to Drive Growth
We plan to continue to use our research and development (“R&D”), engineering, and product marketing resources to continually roll out new and innovative
products. As part of our plan to foster intensified internal growth, we have increased our worldwide R&D and engineering technical staff, and increased our
technical field sales force in Asia to increase opportunities to design-in our products in local markets. Our ability to react to changing customer needs and industry
trends will continue to be key to our success. We intend to leverage our insights into customer demand to continually develop new innovative products within our
existing lines and to modify our existing core products to make them more appealing, addressing changing customer needs and industry trends. We are directing
increased funding and are focusing on developing products to capitalize on the mega trends of electrification, data storage, and wireless communications that are
critical to our future success.
We are also investing in additional capital expenditures to expand key product lines. Over the next few years, we expect to experience higher growth rates than
over the last decade. This expectation is based upon accelerated electrification, such as factory automation, electrical vehicles, and 5G infrastructure.
Growth through Strategic Acquisitions
We plan to continue to expand within the electronic components industry, through the acquisition of other manufacturers of electronic components that have
established positions in major markets, reputations for product innovation, quality, and reliability, strong customer bases, and product lines with which we have
substantial marketing and technical expertise. It also includes certain businesses that possess technologies which we expect to further develop and commercialize
and key niche suppliers that allow us to vertically integrate our supply chain.
Cost Management
We place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs. When our ongoing cost management
activities are not adequate, we take actions to maintain our cost competitiveness including restructuring our business to improve efficiency and operating
performance.
Our growth plan was designed based on the tenets of the key business strategies listed above.
Products
We design, manufacture, and market electronic components that cover a wide range of functions and technologies. Our products include commodity, non-
commodity, and custom products in which we believe we enjoy a good reputation and strong brand recognition, including our Siliconix, Dale, Draloric, Beyschlag,
Sfernice, MCB, UltraSource, Applied Thin-Film Products, IHLP®, HiRel Systems, Sprague, Vitramon, Barry, Roederstein, ESTA, and BCcomponents brands.
We promote our ability to provide “one-stop shop” service to customers, whereby they can streamline their design and purchasing processes by ordering multiple
types of products from Vishay. Our technical sales force consisting of field application engineers offers customers the complete breadth of the Vishay portfolio for
their applications. We aim to use this broad portfolio to increase opportunities to have our components selected and “designed in” to new end products.
We consider any product which is completely interchangeable with a competitor’s product to be a “commodity product.” Commodity products serve many
markets. For 2023, commodity products comprised 31% of our revenues.
We consider any of our standard products that may be sold to multiple customers, which is not completely interchangeable with a competitor’s product, to be a
“non-commodity” product. Non-commodity products generally have a small number of competitors who have similar, but not exact, products. Non-commodity
products typically serve a particular end-use market. For 2023, non-commodity products comprised 47% of our revenues.
We also sell several custom products. Usually, a custom product is designed for a specific customer, and such part number is sold to only that customer. For
2023, custom products comprised 22% of our revenues.
We evaluate our level of product innovation by measuring how much of our revenue is derived from products developed in the previous five years. Products for
certain end-use markets, particularly the automotive market, tend to have longer product life cycles, which may impact these metrics. Approximately 25% of our
annual revenues are generated by products that were developed in the previous five years.
Product Segments
Our products can be divided into two general classes: semiconductors and passive components. Semiconductors are sometimes referred to as “active components”
because they require power to function whereas passive components do not require power to function. Our semiconductor and passive components products are
further categorized based on their functionality for financial reporting purposes.
7
Semiconductors
Our semiconductor products include metal oxide semiconductor field-effect transistors ("MOSFETs"), diodes, and optoelectronic components. Semiconductors
are typically used to perform functions such as switching, amplifying, rectifying, routing, or transmitting electrical signals, power conversion, and power management.
MOSFETs Segment
MOSFETs function as solid state switches to control power. Our MOSFETs business includes both the commodity and non-commodity markets in which we
believe that we enjoy a good reputation and strong brand recognition (Siliconix). MOSFETs applications include mobile phones, notebook and desktop
computers, tablet computers, digital cameras, televisions, DC/DC and AC/DC switch mode power supplies, solar inverters, automotive and industrial systems. We
are a leader in low-voltage TrenchFET MOSFETs and also offer high-voltage MOSFETs. Our MOSFETs product line includes low- and medium-voltage
TrenchFET MOSFETs, high-voltage planar MOSFETs, high voltage Super Junction MOSFETs, power integrated circuits (power ICs), and integrated function
power devices. We are one of the technology leaders in MOSFETs, with a tradition of innovation in wafer design, packaging, and performance. Our acquisition of
MaxPower Semiconductor, Inc. on October 28, 2022 adds leading edge silicon and silicon carbide technology to our MOSFETs product line. Our pending
acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment.
In 2023, commodity products comprised 45% of our annual MOSFETs segment revenues. Non-commodity products comprised 42% of our annual MOSFETs
segment revenues. Custom products comprised 13% of our annual MOSFETs segment revenues. Approximately 30% of our annual MOSFETs segment
revenues were generated by products that were developed in the previous five years.
Diodes Segment
Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide
electromagnetic interference filtering. Our Diodes business is a solid business with a strong market presence in both the commodity and non-commodity markets.
The products that comprise our Diodes business represent our broadest product line and include rectifiers, small signal diodes, protection diodes, thyristors/SCRs
and power modules. The primary application of rectifiers, found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC
supply. Vishay is the worldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumer
markets. Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power loss and improves the efficiency
of end systems and eSMP®, the best in class high-current density surface mount packages. Our wide selection of small signal diodes consist of the following
functions: switching, tuning, band-switching, RF attenuation and voltage regulation (Zener). They are available in various glass and plastic packaging options and
generally are used in electronic circuits, where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage
suppressor) diodes. The portfolio of protection diodes includes ESD protection and EMI filter. Our thyristors or SCR (silicon-controlled rectifiers) are very
popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EV are the focus of our power modules
business (IGBT or MOSFET modules). These modules can be customized to fit in different customer design requirements.
In 2023, commodity products comprised 55% of our annual Diodes segment revenues. Non-commodity products comprised 26% of our annual Diodes segment
revenues. Custom products comprised 19% of our annual Diodes segment revenues. Approximately 30% of our annual Diodes segment revenues were generated
by products that were developed in the previous five years.
Optoelectronic Components Segment
Optoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presence in both the commodity and
non-commodity markets. Our broad range of standard and customer specific optoelectronic components includes infrared (“IR”) emitters and detectors, IR
remote control receivers, optocouplers, solid-state relays, optical sensors, light-emitting diodes (“LEDs”), 7-segment displays, and IR data transceiver modules
(IrDA®). Our IR remote control receivers are designed for use in infrared remote control, data transmission, and light barrier applications in end products including
televisions, set-top boxes, notebook computers, and audio systems. We are the leading manufacturer of IR remote control receivers. Our optocouplers electrically
isolate input and output signals. Uses include switch-mode power supplies, consumer electronics, telecommunications equipment, solar inverters, and industrial
systems. Our IR data transceiver modules are used for short range, two-way, high-speed, and secure wireless data transfer between electronic devices such as
home medical appliances, mobile phones, industrial data loggers, and metering. Our optical sensors product line was considerably strengthened by our acquisition
of Capella in 2014. Our optical sensors products include ambient light sensors, optical encoders, integrated photodiode and I/V amplifiers, proximity sensors,
color sensors, and UV sensors. Applications include telecommunications, mobile phones, smartphone, handheld devices, digital cameras, laptops, desktop
computers, LED backlighting, office automation equipment, household electrical appliance and automotive electronics. Our LEDs are designed for backlighting and
illumination in automotive and other applications. Our LEDs include ultra-bright as well as small surface-mount packages, with products available in all standard
colors including white.
All of our Optoelectronic Components segment products are non-commodity or custom products. Approximately 25% of our annual Optoelectronic Components
segment revenues were generated by products that were developed in the previous five years.
8
Passive Components
Our passive components include resistors, inductors, and capacitors. Passive components are used to store electrical charges, to limit or resist electrical current,
and to help in filtering, surge suppression, measurement, timing, and tuning applications.
Resistors Segment
Resistors impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current. Our
Resistors business is our original business. We maintain the broadest portfolio of resistor products worldwide. Under current market conditions, the business is
solid, predictable, and growing at relatively stable selling prices. We are a market leader with a strong technology base, many specialty products, and strong brand
recognition (such as our Dale, Draloric, Beyschlag, and Sfernice brands). We focus on higher value markets in specialized industries, while maintaining a complete
portfolio of commodity products. We do not aim to be the volume leader in commodity markets.
Resistors vary widely in precision and cost, and are manufactured from numerous materials and in many forms. Linear resistive components are classified as
variable or fixed, depending on whether or not their resistance is adjustable. Non-linear resistors function by varying in resistance under influence of temperature
(thermistors) or voltage (varistors). They can be used in temperature-measuring applications or as current or voltage-limiting devices. We manufacture virtually all
types of fixed resistors, both in discrete and network forms, as well as many variable types.
Vishay resistor innovations include Power Metal Strip® technology. These resistors feature very low resistance and are used to measure changes in current flow
(current sensing) or divert current flow (shunting).
In 2023, commodity products comprised 19% of our annual Resistors segment revenues. Non-commodity products comprised 53% of our annual Resistors
segment revenues. Custom products comprised 28% of our annual Resistors segment revenues. Approximately 15% of our annual Resistors segment revenues
were generated by products that were developed in the previous five years.
Inductors Segment
Inductors also impede electric current. Inductors use an internal magnetic field to change alternating current phase and resist alternating current. While part of our
traditional business, the inductors product line has grown significantly in recent years. We are a market leader with a strong technology base, many specialty
products, and strong name recognition (such as our IHLP® and HiRel Systems brands). We focus on higher value markets in specialized industries, such as the
industrial, automotive, military, and medical end markets.
Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage. Vishay inductor innovations include
our patented IHLP low-profile, high-current inductor technology with industry-leading specifications. Our low-profile, high-current inductors save circuit board
space and power in voltage regulator module (“VRM”) and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions
focusing on high performance and high reliability.
Substantially all of our Inductors segment products are non-commodity or custom products. Approximately 15% of our annual Inductors segment revenues were
generated by products that were developed in the previous five years.
Capacitors Segment
Capacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-quality products. We have a strong
presence worldwide in specialty markets based on our product performance and reliability and strong brand recognition (including our Sprague, Vitramon,
Roederstein, BCcomponents, and ESTA brands). We focus on higher value markets in specialized industries, while maintaining a complete portfolio of commodity
products. We do not aim to be the volume leader in commodity markets. Capacitors are used in almost all electronic circuits. They store energy and discharge it
when needed. Important applications for capacitors include electronic filtering for linear and switching power supplies; decoupling and bypass of electronic signals
for integrated circuits and circuit boards; and frequency control, timing and conditioning of electronic signals for a broad range of applications.
We manufacture products based on all major capacitor technologies: tantalum (molded chip tantalum, coated chip tantalum, solid through-hole tantalum, wet
tantalum, and polymer), ceramic (multilayer chip and ceramic disc), film, power, heavy-current, and aluminum electrolytic. Our capacitors range from tiny surface-
mount devices for hearing aids and mobile devices to large power correction capacitors used in renewable energy, heavy industry, and electrical power grids. We
are a recognized technology leader in many product ranges, securing our strong position in military and medical markets, and in a wide range of industrial and
automotive applications. Our wet tantalum and MicroTan™ technologies are market leaders.
In 2023, commodity products comprised 28% of our annual Capacitors segment revenues. Non-commodity products comprised 48% of our annual Capacitors
segment revenues. Custom products comprised 24% of our annual Capacitors segment revenues. Approximately 30% of our annual Capacitors segment revenues
were generated by products that were developed in the previous five years.
9
Military Qualifications
We have qualified certain of our products under various military specifications approved and monitored by United States government agencies, and under certain
European military specifications. Qualification levels are based in part upon the rate of failure of products. In order to maintain the classification level of a product,
we must continuously perform tests on the product and the results of these tests must be reported to the government agencies. If the product fails to meet the
requirements for the applicable classification level, the product’s classification may be reduced to a lower level. During the time that the classification level is
reduced for a product with military application, net revenues and earnings attributable to that product may be adversely affected.
Manufacturing Operations
In order to better serve our customers, we maintain production facilities in locations where we market the bulk of our products, such as the United States,
Germany, and Asia. To optimize production efficiencies, we have whenever practicable established manufacturing facilities in countries, such as India, Israel,
Malaysia, Mexico, the People’s Republic of China, and the Philippines, where we can benefit from lower labor costs and also benefit from various government
incentives, including tax relief.
One of our most sophisticated manufacturing operations is the production of power semiconductor components. This manufacturing process involves two phases of
production: wafer fabrication and assembly (or packaging). Wafer fabrication subjects silicon wafers to various thermal, metallurgical, and chemical process steps
that change their electrical and physical properties. These process steps define cells or circuits within numerous individual devices (termed “dies” or “chips”) on
each wafer. Assembly is the sequence of production steps that divides the wafer into individual chips and encloses the chips in structures (termed “packages”) that
make them usable in a circuit. Both wafer fabrication and assembly phases incorporate wafer level and device level electrical testing to ensure that device design
integrity has been achieved.
In the United States, our manufacturing facilities are located in California, Connecticut, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, Rhode
Island, South Dakota, Vermont, and Wisconsin. In Asia, our main manufacturing facilities are located in the People’s Republic of China, the Republic of China
(Taiwan), India, and Malaysia. In Europe, our main manufacturing facilities are located in Germany, France, and the Czech Republic. We have substantial
manufacturing facilities in Israel. We also have manufacturing facilities in Austria, Dominican Republic, Japan, Hungary, Italy, Mexico, Portugal, and the Philippines.
Over the past several years, we have invested substantial resources to increase the efficiency of our plants, which we believe will further reduce production costs.
All of our manufacturing operations have received ISO 9001 certification. ISO 9001 is a comprehensive set of quality program standards developed by the
International Standards Organization.
Supply Chain
The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and
subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the
supply chain. Global shipping impacts several parts of the supply chain and the disruptions experienced in the recent years have, at times, negatively impacted our
ability to manufacture products and to deliver them to customers.
Although most materials incorporated into our products are available from a number of sources, certain materials, including plastics and metals, are produced in
only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity
constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply.
The unavailability or reduced availability of these materials could require us to temporarily cease or reduce production or incur additional costs.
Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used
in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of
these materials.
Many of the metals used in the manufacture of our products, including gold, copper, and palladium, are traded on active markets and can be subject to significant
price volatility. To ensure adequate supply and to provide cost certainty, our policy is to enter into short-term commitments to purchase defined portions of annual
consumption of the raw materials utilized if market prices decline below budget. If after entering into these commitments, the market prices for these raw materials
decline, we must recognize losses on these adverse purchase commitments. In certain circumstances, we also purchase precious metals bullion in excess of our
immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations.
Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources
could require us to reduce production or incur additional costs.
We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished
goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our
agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in
some cases, require us to recognize losses on these adverse purchase commitments. Our agreements may limit our ability to increase production, particularly during
periods of growing demand for our products.
10
Due to our global supply chain, we are impacted by global trade disputes. The governments of the U.S. and the People’s Republic of China remain in a trade
dispute that has resulted in tariffs and other trade restrictions including import / export prohibitions. Disruptions to global trade could result in customers seeking
different sources of product or requiring us to seek different sources of supply. New or revised trade agreements could require changes in operations in the long-
term.
We remain cognizant of these supply chain challenges and seek to minimize their effects whenever possible. Despite our best efforts, there can be no assurances
we will be successful in mitigating these risks.
Inventory and Backlog
We manufacture both standardized products and those designed and produced to meet customer specifications. We maintain an inventory of standardized
components and monitor the backlog of outstanding orders for our products.
We include in our backlog only open orders that we expect to ship in the next twelve months. Many of our customers encounter uncertain and changing demand for
their products. They typically order products from us based on their forecasts. If demand falls below customers’ forecasts, or if customers do not control their
inventory effectively, they may cancel or reschedule the shipments included in our backlog, in many instances without the payment of any penalty. Therefore, our
backlog at any point in time is not necessarily indicative of the results to be expected for future periods.
Customers and Marketing
We sell our products to original equipment manufacturers (“OEMs”), electronic manufacturing services (“EMS”) companies, which manufacture for OEMs on an
outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies. See Note 15 to
our consolidated financial statements for net revenues by customer type.
Our sales organizations are regionally based. While our sales and support procedures are typically similar across all regions, we remain flexible in our ability to offer
programs tailored to our customers’ specific support requirements in each local area. The aim of our sales organizations is supporting our customers across all
product lines, developing new design wins, negotiating contracts, and providing general commercial support as would normally be expected of a large multi-national
sales force.
We have an established Strategic Global Account program, which provides each of our top customers with a dedicated Strategic Global Account Manager. Our
Strategic Global Account Managers are typically highly experienced salesmen or saleswomen who are capable of providing key customers with the coordination
and management visibility required in a complex multi-product business relationship. They typically coordinate the sales, pricing, contract, logistic, quality, and other
aspects of the customer’s business requirements. The Strategic Global Account Manager normally is the focal point of communication between Vishay and our
main customers. We maintain a similar program for our strategic distributors as well.
We work with our customers so that our products are incorporated into the design of electronic equipment at the earliest stages of development and to provide
technical and applications support. In addition to our staff of direct field sales personnel, independent manufacturers’ representatives, and distributors, our Business
Development group maintains teams of dedicated Field Application Engineers (“FAEs”) to assist our customers in solving technical problems and in developing
products to meet specific customer application needs using our entire product portfolio to provide support for our customers’ engineering needs. Organized by
market segment, our Business Development FAEs bring specific knowledge of component applications in their areas of expertise in the automotive,
telecommunications, computer, consumer/entertainment, industrial, peripherals, digital consumer, and other market segments. With the ultimate goal of a Vishay
“design-in” – the process by which our customers specify a Vishay component in their products – this program offers our customers enhanced access to all Vishay
technologies while at the same time increasing design wins, and ultimately sales, for us. Most importantly, the process is closely monitored via a proprietary
database developed by our Business Development group. Our database captures specific design activities and allows for real-time measurement of new business
potential for our management team.
Our top 30 customers have been relatively stable despite not having long-term commitments to purchase our products. With selected customers, we have signed
longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customers represent approximately 68% of our total net
revenues. No single customer comprised more than 10% of our total net revenues for 2023.
In certain areas we also work with sales representatives. The commission expense for these sales representatives is not material.
Research and Development
Many of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, and developed by Dr. Felix Zandman,
our engineers, and our scientists. We maintain strategically placed design centers where proximity to customers enables us to more easily gauge and satisfy the
needs of local markets. These design centers are located predominantly in the United States, Germany, Italy, Israel, Ireland, the People’s Republic of China,
France, and the Republic of China (Taiwan).
We also employ research and development personnel and promote programs at a number of our production facilities to develop new products and new
applications of existing products and to improve manufacturing processes and technologies. This decentralized system encourages product development at
individual manufacturing facilities, closer to our customers.
11
Competition
We face strong competition in various product lines from both domestic and foreign manufacturers. Our primary competitors by product type include:
• MOSFETs: Infineon, ON Semiconductor, Renesas, STMicroelectronics, Toshiba.
• Diodes: Diodes Inc., Nexperia, ON Semiconductor, Rohm, STMicroelectronics.
• Optoelectronic Components: Broadcom, ON Semiconductor, Renesas, Toshiba.
• Resistors: Bourns, KOA, Murata, Panasonic, Rohm, TDK-EPCOS, Yageo.
•
Inductors: Bourns, Cyntec, Murata, Panasonic, Taiyo Yuden, TDK-EPCOS, Yageo.
• Capacitors: Kyocera, Murata, Nichicon, Panasonic, Taiyo Yuden, TDK-EPCOS, Yageo.
There are many other companies that produce products in the markets in which we compete.
Our competitive position depends on our ability to maintain a competitive advantage on the basis of product quality, know-how, proprietary data, market
knowledge, service capability, technological innovation, business reputation, and price competitiveness. Our sales and marketing programs aim to compete by
offering our customers a broad range of world-class technologies and products, superior global sales and distribution support, and a secure and multi-location
source of product supply.
There has been a considerable amount of consolidation activity in the electronic component industry, some of which involved our primary competitors. We view
the industry consolidation as an opportunity for us to gain business as an independent second-source supplier.
Patents and Licenses
We have made a significant investment in securing intellectual property protection for our technology and products. We seek to protect our technology by, among
other things, filing patent applications for technology considered important to the development of our business. We also rely upon trade secrets, unpatented know-
how, continuing technological innovation, and the aggressive pursuit of licensing opportunities to help develop and maintain our competitive position.
Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been
awarded, have filed applications for, or have been licensed under, numerous patents in the United States and other countries, there can be no assurance concerning
the degree of protection afforded by these patents or the likelihood that pending patents will be issued.
We require all of our technical, research and development, sales and marketing, and management employees and most consultants and other advisors to execute
confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information
developed or made known to the entity or individual during the course of the entity’s or individual’s relationship with us is to be kept confidential and not disclosed
to third parties except in specific circumstances. Substantially all of our technical, research and development, sales and marketing, and management employees have
entered into agreements providing for the assignment to us of rights to inventions made by them while employed by us.
When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights through legal action, and we intend to
continue to do so. See Item 3, “Legal Proceedings.”
Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, no particular patent is considered
individually material to our business.
Human Capital
As a global company, we collaborate internationally and celebrate the diversity of our local cultures. Employees are encouraged to bring their unique perspectives,
help identify opportunities to collaborate, and open themselves to the career development that comes from learning from others.
As of December 31, 2023, we employed approximately 23,500 full time employees worldwide. Reflecting our global business, our executive management team
and many leadership positions are dispersed throughout the world.
12
Employees by location are summarized as follows:
United States
People’s Republic of China
Germany
Israel
Taiwan
Czech Republic
India
Other Europe
Other Americas
Other Asia
Total
2,400
7,300
2,300
2,300
2,000
1,200
1,000
1,600
1,500
1,900
23,500
Many of our employees outside the United States are members of workers councils or unions or otherwise subject to collective bargaining agreements. Employees
at one small U.S. facility, representing less than 1% of our U.S. workforce, are represented by a trade union. We consider our relations with our employees
positive, fair, and equitable.
Our greatest assets are our employees, and our continued success depends on our ability to attract, retain, and develop high levels of talent across the organization.
Each person and each role plays a critical role in our success.
Vishay continuously invests in its people through diverse training offerings, networking opportunities, and a commitment to developing life and professional skills.
Employee development programs offer individual and group learning to maintain profitable business growth while increasing speed and agility.
Organizationally, Vishay continues to evolve and change to meet or exceed customer and market demands, requiring heightened collaboration and agility. We
continue to embed a high-performance culture whereby employees are encouraged to surface ideas, employ continuous improvement attitudes, and work together
to achieve our organizational goals. Training and communication efforts have been implemented to ensure all employees know what is expected of them. The first
phase of implementing a global human capital management system was completed in late 2023 to support our international workforce's communication,
development, and efficient business processes.
During 2023, resources were added to lead the global functions of Talent Acquisition and Total Rewards to refine our focus on attracting and nurturing key talent.
Incentive compensation programs have been revised to create a unified focus on profitable growth. Organizational and structural changes that have allowed us to
flatten the organizational structure and redefine some leadership roles continue to be implemented. We empower our employees by pushing down decision-making,
and in turn, we speed up decision-making across the organization.
Regulatory Compliance
We are required to comply with numerous regulations that are normal and customary to businesses in our industry and the jurisdictions in which we operate. These
regulations relate to, among other things, environmental health and safety, procurement integrity, export control, government security regulations, employment
practices, accuracy of records and the recording of costs, anti-corruption, and privacy. See Item 1A, “Risk Factors,” for additional discussion of such regulations
and the potential consequences for non-compliance.
Environmental Health and Safety
We have adopted an Environmental Health and Safety Corporate Policy that commits us to achieve and maintain compliance with applicable environmental laws, to
promote proper management of hazardous materials for the safety of our employees and the protection of the environment, and to minimize the hazardous materials
generated in the course of our operations. This policy is implemented with accountability directly to the Board of Directors. In addition, our manufacturing
operations are subject to various federal, state, and local laws restricting discharge of materials into the environment.
We are involved in environmental remediation programs at various sites currently or formerly owned by us and our subsidiaries both within and outside of the U.S.,
in addition to involvement as a potentially responsible party (“PRP”) at Superfund sites. Certain obligations as a PRP have arisen in connection with business
acquisitions. The remediation programs are on-going and the ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the
required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. See Item 3, “Legal Proceedings.”
We are not involved in any pending or threatened proceedings that would require curtailment of our operations. We continually expend funds to ensure that our
facilities comply with applicable environmental regulations. While we believe that we are in material compliance with applicable environmental laws, we cannot
accurately predict future developments and do not necessarily have knowledge of all past occurrences on sites that we currently occupy. More stringent
environmental regulations may be enacted in the future, and we cannot determine the modifications, if any, in our operations that any such future regulations might
require, or the cost of compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of our business
and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in the future.
13
With each acquisition, we attempt to identify potential environmental concerns and to minimize, or obtain indemnification for, the environmental matters we may be
required to address. In addition, we establish reserves for specifically identified potential environmental liabilities. We believe that the reserves we have established
are adequate. Nevertheless, we have in the past and may in the future inherit certain pre-existing environmental liabilities, generally based on successor liability
doctrines. Although we have never been involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no
assurance that in connection with any past or future acquisition we will not be obligated to address environmental matters that could have a material adverse impact
on our operations.
Company Information and Website
We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (“SEC”) under the Securities
Exchange Act of 1934. The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers,
including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.
In addition, our company website can be found on the Internet at www.vishay.com. The website contains information about us and our operations. Copies of each
of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as
soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports, access ir.vishay.com
and click on “SEC Filings.”
The following corporate governance related documents are also available on our website:
• Corporate Governance Principles
• Code of Business Conduct and Ethics
• Code of Ethics for Financial Officers
• Audit Committee Charter
• Nominating and Corporate Governance Committee Charter
• Compensation Committee Charter
•
• Director Stock Ownership Guidelines
• Clawback Policy
• Hedging-Pledging Policy
• Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors
• Related Party Transactions Policy
Executive Stock Ownership Guidelines
To view these documents, access ir.vishay.com and click on “Corporate Governance.”
Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at the following address:
Corporate Investor Relations
Vishay Intertechnology, Inc.
63 Lancaster Avenue
Malvern, PA 19355-2143
14
Item 1A.
RISK FACTORS
From time to time, information provided by us, including but not limited to statements in this report, or other statements made by or on our behalf, may contain
“forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks, uncertainties,
and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from those anticipated.
Set forth below are important factors that could cause our results, performance, or achievements to differ materially from those in any forward-looking statements
made by us or on our behalf. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the
following to be a complete discussion of all potential risks or uncertainties.
Risks relating to our business
Our business is cyclical and future periods of decline and increased demand are not predictable.
The electronic component industry is highly cyclical and experiences periods of decline from time to time. We and others in the electronic components industry have
experienced these conditions in the recent past and cannot predict when we may experience downturns in the future. Market conditions, such as during a decline in
product demand on a global basis, could result in order cancellations and deferrals, lower average selling prices, and a material and adverse impact on our results of
operations. These declines in demand are usually driven by market conditions in the end markets for our products, but may also result from distributors not
appropriately managing their inventory levels.
We may also experience intense demand for our products in periods of a rising economy and we may have difficulty expanding our manufacturing capacity to
satisfy demand during such periods. Factors which could limit such expansion include delays in procurement of manufacturing equipment, shortages of skilled
personnel, and physical constraints on expansion of our facilities.
Changes in the demand mix, needed technologies, and these end markets may adversely affect our ability to match our products, inventory, and capacity to meet
customer demand and could adversely affect our operating results and financial condition. A slowdown in demand or recessionary trends in the global economy
makes it more difficult for us to predict our future sales and manage our operations, and could adversely impact our results of operations. Capacity that we add
during upturns in the business cycle may result in excess capacity during periods when demand for our products recede, resulting in inefficient use of capital which
could also adversely affect us.
A downturn in our business in general, or isolated to a particular sector, could require us to incur restructuring and severance charges and/or asset write-downs.
We face significant challenges managing our capacity expansion strategy.
As part of our strategy to drive growth and increase capacity, we are increasing internal capacity by investing $329 million in 2023 and plan to invest $1.2 billion
total from 2023 to 2025 and plan to increase external capacity by outsourcing additional commodity products to subcontractors. Our capacity expansion plans
include building a 12-inch wafer fab in Itzehoe, Germany adjacent to our existing 8-inch wafer fab, a new power inductor site in Mexico, a resistor manufacturing
expansion in Mexico, and expanded diode manufacturing in Taiwan and Turin, Italy. Additionally, the planned transaction with Nexperia BV will add a wafer
fabrication facility and operations in Newport, South Wales, U.K. There is no assurance that we will be able to close the transaction for the Nexperia wafer
fabrication facility. There are demand-related risks associated with all growth initiatives. There are also inherent execution risks in building and starting new wafer
fabs, acquiring existing wafer fabs, and expanding production capacity at our own facilities or that of new or existing subcontractors that could significantly increase
costs and negatively impact our operating results. The risks include, but are not limited to, the following:
•
•
•
•
design and construction delays and cost overruns;
issues installing and qualifying new equipment and ramping production;
poor production process yields and reduced quality control; and
insufficient personnel with requisite expertise and experience to operate the facilities.
Our business may be adversely affected by the widespread outbreak of diseases and the mitigation efforts by governments worldwide to control their
spread.
We cannot predict when future disease outbreaks or pandemics will occur. The potential risks and effects of future disease outbreaks and the related economic
impact that could have an adverse effect on our business include, but are not limited to:
•
•
•
•
•
•
•
•
Adverse impact on our customers and supply channels;
Decrease in sales, product demand and pricing and unfavorable economic and market conditions;
Increased costs, including higher shipping costs due to reduced shipping capacity;
Restrictions on our manufacturing, support operations or workforce, or similar limitations for our customers, vendors, and suppliers, that could limit our
ability to meet customer demand;
Potential increased credit risk if customers, distributors, and resellers are unable to pay us, or must delay paying their obligations to us;
Restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures could
result in delays;
Impact on our workforce/employees due to the spread of the virus and any shelter-in-place orders; and
Cybersecurity risks as a result of extended periods of remote work arrangements.
Such effects could result in us being required to record impairment charges related to our property and equipment, intangible assets, or goodwill.
15
In the past we have grown through successful integration of acquired businesses, but this may not continue.
Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of expansion through acquisitions. Despite our plan to
continue to grow, in part, through targeted acquisitions, we may be unable to continue to identify, have the financial capabilities to acquire, or successfully complete
transactions with suitable acquisition candidates. The rapid consolidation that our industry has experienced may further decrease our ability to identify attractive
opportunities for acquisition. We are subject to various U.S. and foreign competition laws and regulations that may affect our ability to complete certain
acquisitions. Also, if an acquired business fails to operate as anticipated, cannot be successfully integrated with our other businesses, or we cannot effectively
mitigate the assumed, contingent, and unknown liabilities acquired, our results of operations, financial condition, enterprise value, market value, and prospects could
all be materially adversely affected.
To remain successful, we must continue to innovate, and our investments in new technologies may not prove successful.
Our future operating results are dependent on our ability to continually develop, introduce, and market new and innovative products, to modify existing products, to
respond to technological change, and to customize certain products to meet customer requirements. There are numerous risks inherent in this process, including the
risks that we will be unable to anticipate the direction of technological change or that we will be unable to develop and market new products and applications in a
timely fashion to satisfy customer demands. If this occurs, we could lose customers and experience adverse effects on our financial condition and results of
operations.
In addition to our own research and development initiatives, we periodically invest in technology start-up enterprises, in which we may acquire a controlling or
noncontrolling interest but whose technology would be available to be commercialized by us. There are numerous risks in investments of this nature including the
limited operating history of such start-up entities, their need for capital, and their limited or absence of production experience, as well as the risk that their
technologies may prove ineffective or fail to gain acceptance in the marketplace. Certain of our historical investments in start-up companies have not succeeded,
and there can be no assurance that our current and future investments in start-up enterprises will prove successful.
Our business and our results of operations are sensitive to supply chain disruptions.
The production and sale of our products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party foundries and
subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all other parts of the
supply chain. Global shipping impacts several parts of the supply chain and the disruptions experienced in recent years have, at times, negatively impacted our
ability to manufacture products and to deliver them to customers.
Although most materials incorporated into our products are available from a number of sources, certain materials, including plastics and metals, are produced in
only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times, face capacity
constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost of our supply.
The unavailability or reduced availability of these materials could require us to temporarily cease or reduce production or incur additional costs.
Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used
in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of
these materials.
Many of the metals used in the manufacture of our products, including gold, copper, and palladium, are traded on active markets and can be subject to significant
price volatility. To ensure adequate supply and to provide cost certainty, our policy is to enter into short-term commitments to purchase defined portions of annual
consumption of the raw materials utilized if market prices decline below budget. In certain circumstances, we purchase precious metals bullion in excess of our
immediate manufacturing needs to mitigate the risk of supply shortages or volatile price fluctuations. If after entering into these commitments or purchasing the
metals bullion, the market prices for these raw materials decline, we must recognize losses on these adverse purchase commitments and metals bullion purchases.
Our production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these resources
could require us to reduce production or incur additional costs.
We use third-party foundries and subcontractors for certain of our manufacturing activities, primarily wafer fabrication and the assembly and testing of finished
goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. Our
agreements with these manufacturers typically require us to commit to purchase services based on forecasted product needs, which may be inaccurate, and, in
some cases, require us to recognize losses on these adverse purchase commitments. Our agreements may limit our ability to increase production, particularly during
periods of growing demand for our products.
Due to our global supply chain, we are impacted by global trade disputes. The governments of the U.S. and the People’s Republic of China remain in a trade
dispute that has resulted in tariffs and other trade restrictions including import / export prohibitions. Disruptions to global trade could result in customers seeking
different sources of product or requiring us to seek different sources of supply. New or revised trade agreements could require changes in operations in the long-
term.
We remain cognizant of these supply chain challenges and seek to minimize their effects whenever possible. Despite our best efforts, there can be no assurances
we will be successful in mitigating these risks and if we are unable to do so, they may have material negative impacts on our business and results of operations.
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Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology and to
operate our business without infringing or violating the intellectual property rights of others.
Protection of intellectual property often involves complex legal and factual issues. We will be able to protect our proprietary rights from unauthorized use by third
parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or are effectively maintained as trade secrets. We have
applied, and will continue to apply, for patents covering our technologies and products, as we deem appropriate. However, our applications may not result in
issued patents. Also, our existing patents and any future patents may not be sufficiently broad to prevent others from practicing our technologies or from developing
competing products. Others may independently develop similar or alternative technologies, design around our patented technologies, or may challenge or seek to
invalidate our patents. Also, the legal system in certain countries in which we operate may not provide or may not continue to provide sufficient, intellectual property
legal protections and remedies.
Litigation regarding patent and other intellectual property rights is prevalent in the electronic components industry, particularly the discrete semiconductor sector.
We have on occasion been notified that we may be infringing on patent and other intellectual property rights of others. In addition, customers purchasing
components from us have rights to indemnification under certain circumstances if such components violate the intellectual property rights of others. Further, we have
observed that in the current business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending
patent claims against competitors. We will continue to vigorously defend our intellectual property rights, and may become party to disputes regarding patent
licensing and cross patent licensing. Although licenses are generally offered in such situations and we have successfully resolved these situations in the past, there
can be no assurance that we will not be subject to future litigation alleging intellectual property rights infringement, or that we will be able to obtain licenses on
acceptable terms. An unfavorable outcome regarding one of these matters could have a material adverse effect on our business and results of operations.
We face intense competition in our business, and are susceptible to certain concentrations.
Our business is highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on the bases of product quality and
reliability, availability, customer service, technological innovation, timely delivery, and price. Our ability to compete successfully also depends on elements out of our
control. We face significant competition within each of our product segments from larger global manufacturers and smaller manufacturers focused on specific
market niches. The electronic component industry has become increasingly concentrated and globalized in recent years as many of our primary competitors have
been acquired. The acquiring companies, most of which are larger than us, have significant financial resources and technological capabilities.
A material portion of our revenues are derived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets have
historically experienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereof could reduce their
purchases of our products, which could have an adverse effect on our results of operations and financial position.
While no customer comprises over 10% of our consolidated net revenues, certain subsidiaries and product lines are susceptible to customer concentrations and
have customers which comprise greater than 10% of the subsidiary’s or product line’s net revenues. The loss of one of these customers could have a material
effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, which could result in an impairment charge which could
be material to our consolidated financial statements.
Our backlog is subject to customer cancellation.
Many of the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may on occasion double and triple order
components from multiple sources to ensure timely delivery when demand exceeds global supply. They often cancel orders when business is weak and inventories
are excessive. Therefore, we cannot be certain that the amount of our backlog accurately reflects the level of orders that we will ultimately deliver. Our results of
operations could be adversely impacted if customers cancel a material portion of orders in our backlog.
Our future success is substantially dependent on our ability to attract and retain highly qualified technical, managerial, marketing, finance, and
administrative personnel.
Rapid changes in technologies, frequent new product introductions, and declining average selling prices over product life cycles require us to attract and retain
highly qualified personnel to develop and manufacture products that feature technological innovations and bring them to market on a timely basis. Our complex
operations also require us to attract and retain highly qualified administrative personnel in functions such as legal, tax, accounting, financial reporting, auditing, and
treasury. The market for personnel with such qualifications is highly competitive. While we have employment agreements with certain of our executives, we have
not entered into employment agreements with all of our key personnel.
The loss of the services of or the failure to effectively recruit qualified personnel could have a material adverse effect on our business.
Significant fluctuations in interest rates could adversely affect our results of operations and financial position.
We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. Our credit facility bears interest at variable rates based on
Secured Overnight Financing Rate ("SOFR") and other currency-specific reference rates. A significant increase in such reference rates would significantly increase
our interest expense. A general increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investment
balances, which are currently greater than our debt balances. However, there can be no assurance that the interest rate earned on cash and short-term investments
will move in tandem with the interest rate paid on our variable rate debt.
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Cyberattacks and other interruptions in our information technology systems could adversely affect our business.
We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business. We are exposed to, and
may be adversely affected by, potential cyberattacks or other disruptions to our information technology systems and data security. Any significant system or
network disruption, including, but not limited to, new system implementations, computer viruses, security breaches, phishing, spoofing, cyberattacks, facility issues
or energy blackouts could have a material adverse impact on our operations and results of operations. These incidents, which might be related to industrial or other
espionage, include covertly introducing malware and spyware to our computers and networks (or to an electronic system operated by a third party for our benefit)
and impersonating authorized users, among others. Such a network disruption could result in a loss of the confidentiality of our intellectual property or the release
of sensitive competitive information or customer, supplier or employee personal data. Any loss of such information could harm our competitive position, result in a
loss of customer confidence, and cause us to incur significant costs to remedy the damages caused by the disruptions or security breaches. We have implemented
protective measures to prevent against and limit the effects of system or network disruptions, but there can be no assurance that such measures will be sufficient to
prevent or limit the damage from any disruptions and any such disruption could have a material adverse impact on our business and results of operations.
We are subject to numerous laws and regulations regarding privacy and data protection. The scope of these laws and regulations is evolving rapidly and is subject
to differing interpretations, and thus may be inconsistent among jurisdictions. Such laws and regulations have resulted and will continue to result in significantly
greater compliance burdens and costs for us.
Third-party service providers, such as foundries, subcontractors, distributors, and vendors have access to certain portions of our sensitive data. In the event that
these service providers do not properly safeguard our data that they hold, security breaches and loss of our data could result. Any such loss of data by our third-
party service providers could have a material adverse impact on our business and results of operations.
Future acquisitions could require us to issue additional indebtedness or equity.
If we were to undertake a substantial acquisition for cash, the acquisition would likely need to be financed in part through bank borrowings or the issuance of public
or private debt. This acquisition financing would likely decrease our ratio of earnings to fixed charges and adversely affect other leverage criteria. Under our credit
facility, we are required to obtain the lenders’ consent for certain additional debt financing and to comply with other covenants including the application of specific
financial ratios. We cannot make any assurances that the necessary acquisition financing would be available to us on acceptable terms if and when required. If we
were to undertake an acquisition for equity, the acquisition may have a dilutive effect on the interests of the holders of our common stock.
Regulatory and compliance related risks
Future changes in our environmental liability and compliance obligations may harm our ability to operate or increase our costs.
Our operations, products and/or product packaging are subject to, among other matters, environmental laws and regulations governing, among other matters, air
emissions, wastewater discharges, the handling, disposal and remediation of hazardous substances, wastes and certain chemicals used or generated in our
manufacturing processes, employee health and safety labeling or other notifications with respect to the content or other aspects of our processes, products or
packaging, restrictions on the use of certain materials in or on design aspects of our products or product packaging, and responsibility for disposal of products or
product packaging. We establish reserves for specifically identified potential environmental liabilities. Nevertheless, we have in the past and may in the future inherit
certain pre-existing environmental liabilities, generally based on successor liability doctrines, or otherwise incur environmental liabilities. We are involved in
remediation programs and related litigation at various current and former properties and at third-party disposal sites both within and outside of the United States,
including involvement as a potentially responsible party at Superfund sites. Although we have never been involved in any environmental matter that has had a
material adverse impact on our overall operations, there can be no assurance that in connection with any past or future acquisition, future developments, including
related to our remediation programs, or otherwise, we will not be obligated to address environmental matters that could have a material adverse impact on our
results of operations. In addition, more stringent environmental laws and regulations may be enacted in the future, and we cannot presently determine the
modifications, if any, in our operations that any such future regulations might require, or the cost of compliance with current and future laws and regulations. In order
to resolve liabilities at various sites, we have entered into various administrative orders and consent decrees, some of which may be, under certain conditions,
reopened or subject to renegotiation.
Our products are sold to or used in goods sold to the U.S. government and other governments. By virtue of such sales, we are subject to various
regulatory requirements and risks in the event of non-compliance.
We sell products under prime and subprime contracts with the U.S. government and other governments. Many of these products are used in military applications.
Government contractors must comply with specific procurement regulations and other requirements. These requirements, although customary in government
contracts, impact our performance and compliance costs. Failure to comply with these regulations and requirements could result in contract modifications or
termination, and the assessment of penalties and fines, which could negatively impact our results of operations and financial condition. Our failure to comply with
these regulations and requirements could also lead to suspension or debarment, for cause, from government contracting or subcontracting for a period of time.
Among the causes for debarment are violations of various statutes, including those related to procurement integrity, export control, government security regulations,
employment practices, protection of the environment, accuracy of records and the recording of costs, and foreign corruption. The termination of a government
contract as a result of any of these acts could have a negative impact on our results of operations and financial condition and could have a negative impact on our
reputation and ability to procure other government contracts in the future.
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We have qualified certain of our products under various military specifications approved and monitored by the United States Defense Electronic Supply Center and
under certain European military specifications. These products are assigned certain classification levels. In order to maintain the classification level of a product, we
must continuously perform tests on the products and the results of these tests must be reported to governmental agencies. If a product fails to meet the requirements
of the applicable classification level, its classification may be reduced to a lower level. A decrease in the classification level for a product with a military application
could have an adverse impact on the net revenues and earnings attributable to that product.
Our credit facility restricts our current and future operations and requires compliance with certain financial covenants.
Our credit facility includes restrictions on, among other things, incurring indebtedness, incurring liens on assets, making investments and acquisitions, making asset
sales, and paying cash dividends and making other restricted payments. Our credit facility also requires us to comply with other covenants, including the
maintenance of specific financial ratios. If we are not in compliance with all of such covenants, the credit facility could be terminated by the lenders, and all amounts
outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible debt instruments have cross-default provisions that could
accelerate repayment in the event the indebtedness under the credit facility is accelerated.
Risks associated with our operations outside the United States
We are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate.
We have substantial operations outside the United States, and approximately 74% of our revenues during 2023 were derived from sales to customers outside the
United States. Certain of our assets are located, and certain of our products are produced, in countries which are subject to risks of social, political, economic,
and military instability. This instability could result in wars, riots, nationalization of industry, currency fluctuation, and labor unrest. These conditions could have an
adverse impact on our ability to operate in these regions and, depending on the extent and severity of these conditions, could materially and adversely affect our
overall financial condition, results of operations, and our ability to access our liquidity.
Our business has been in operation in Israel for 53 years, where we have substantial manufacturing operations. Although we have never experienced any material
interruption in our operations attributable to these factors, in spite of several Middle East crises, including the current war with Hamas, our financial condition and
results of operations might be adversely affected if events were to occur in the Middle East that interfered with our operations in Israel.
Our global operations are subject to extensive anti-corruption laws and other regulations.
The U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediaries from making improper
payments or providing anything of value to improperly influence foreign government officials for the purpose of obtaining or retaining business, or obtaining an unfair
advantage. Recent years have seen a substantial increase in the global enforcement of anti-corruption laws. Our continued operation and expansion outside the
United States, including in developing countries, could increase the risk of such violations or violations under other regulations relating to limitations on or licenses
required for sales made to customers located in certain countries. Violations of these laws may result in severe criminal or civil sanctions, could disrupt our business,
and result in a material adverse effect on our reputation, business and results of operations or financial condition.
We attempt to improve profitability by controlling labor costs, but these activities could result in labor unrest or considerable expense.
Historically, our primary labor cost controlling strategy was to transfer manufacturing operations to countries with lower production costs, such as the Dominican
Republic, India, Malaysia, Mexico, the People’s Republic of China, and the Philippines. We believe that our manufacturing footprint is suitable to serve our
customers and end markets, while maintaining lower manufacturing costs. We do not anticipate further transferring any significant existing operations to lower-
labor-cost countries; however, acquired operations may be transferred to lower-labor-cost countries when integrated into Vishay. Currently, our primary labor cost
controlling strategy involves reducing hours and limiting the use of subcontractors and foundries when demand for our products decreases. Shifting operations to
lower-labor-cost countries, reducing hours, or limiting the use of subcontractors and foundries could result in production inefficiencies, higher costs, and/or strikes
or other types of labor unrest.
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We are subject to foreign currency exchange rate risks which may impact our results of operations.
We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of
certain subsidiaries. From time to time, we utilize forward contracts to hedge a portion of projected cash flows from these exposures.
Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies.
Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local
currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one
another. Our exposure to foreign currency risk is more pronounced in situations where, for example, production labor costs are predominantly paid in local
currencies while the sales revenue for those products is denominated in U.S. dollars. This is particularly the case for products produced in Israel, the Czech
Republic, and China.
A change in the mix of the currencies in which we transact our business could have a material effect on results of operations. Furthermore, the timing of cash
receipts and disbursements could have a material effect on our results of operations, particularly if there are significant changes in exchange rates in a short period of
time.
Most of our operating cash is generated by our non-U.S. subsidiaries, and our U.S. parent company and U.S. subsidiaries have significant
payment obligations.
We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2023, 65.5% of our cash and cash equivalents and
short-term investments were held by subsidiaries outside of the United States. Our revolving credit facility provides us with additional U.S. liquidity.
U.S. tax obligations, cash dividends to stockholders, share repurchases, additional convertible debt repurchases, and principal and interest payments on our debt
instruments need to be paid by our U.S. parent company, Vishay Intertechnology, Inc. A U.S.-domiciled subsidiary is expected to be the acquiring entity of
Nexperia's wafer fabrication facility and operations in Newport, South Wales, U.K. Our U.S. subsidiaries have other operating cash needs.
If our U.S. cash and cash equivalents and short-term investment and other liquidity sources are inadequate to satisfy these obligations, we may be required to
repatriate additional cash to the United States and would be required to accrue and pay additional taxes. If we are unable to repatriate adequate cash to the United
States to satisfy these obligations, it could materially and adversely affect our overall financial condition, results of operations and our liquidity.
Changes in U.S. trade policies, and related factors beyond our control, may adversely impact our business, financial condition, and results of operations.
Our business is subject to risks associated with U.S. and foreign legislation and regulations relating to imports, including quotas, duties, tariffs or taxes, and other
import charges or restrictions, which could adversely affect our operations and our ability to import products. The U.S. has taken actions that impact U.S. trade
with China, including restricting the export of certain goods and equipment to China, imposing tariffs on certain goods manufactured in China and imported into the
U.S., including certain of our products. Such actions may impact our competitiveness and adversely affect the demand for these products, or if those costs cannot
be passed on to our customers, could adversely impact our results of operations for affected segments and the Company as a whole.
Further changes in U.S. trade policy could trigger additional retaliatory actions by affected countries. If these consequences are realized, it could result in a general
economic downturn or otherwise have a material adverse effect on our business.
Risks related to our capital structure
The holders of our Class B common stock have effective voting control of our company, giving them the effective ability to prevent a change in control
transaction.
We have two classes of common stock: common stock and Class B common stock. The holders of common stock are entitled to one vote for each share held,
while the holders of Class B common stock are entitled to 10 votes for each share held. At December 31, 2023, the holders of Class B common stock held
approximately 49.1% of the voting power of the Company. The ownership of Class B common stock is highly concentrated, and holders of Class B common stock
effectively can cause the election of directors and approve other actions as stockholders. Mrs. Ruta Zandman (a member of our Board of Directors) controls the
voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.7%
of our Class B common stock and 44.0% of the total voting power of our capital stock as of December 31, 2023. Holders of our Class B common stock may act
in ways that are contrary to, or not in the best interests of, holders of our common stock. The voting rights of the holders of our Class B common stock effectively
give such holders the ability to prevent transactions that would result in a change in control of us, including transactions in which holders of our common stock might
otherwise receive a premium for their shares over the then-current market price.
Our acquisition strategy could be impeded if our Board of Directors were reluctant to authorize the issuance of substantial additional shares.
Our overall long-term business strategy has historically included a strong focus on acquisitions financed alternatively through cash on hand or the incurrence of
indebtedness. We may in the future be presented with attractive investment or strategic opportunities that, because of their size and our financial condition at the
time, would require the issuance of substantial additional amounts of our common stock. If such opportunities were to arise, our Board of Directors may consider
the potentially dilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders, and may therefore be reluctant to
authorize the issuance of additional shares. Any such reluctance could impede our ability to complete certain transactions.
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Our outstanding convertible debt instruments may impact the trading price of our common stock.
We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertible arbitrage strategy with
respect to these instruments. Investors that employ a convertible arbitrage strategy with respect to convertible debt instruments typically implement that strategy by
selling short the common stock underlying the convertible instrument and dynamically adjusting their short position while they hold the instrument. The
implementation of this strategy by investors in our convertible debt instruments, as well as related market regulatory actions, could have a significant impact on the
trading prices of our common stock, and the trading prices and liquidity of our convertible debt instruments. The price of our common stock and our convertible
debt instruments could also be affected by possible sales of our common stock by investors who view our convertible debt instruments as more attractive means of
equity participation in us.
Conversion of our outstanding 2025 Notes and 2030 Notes may dilute the ownership interest of our existing stockholders, including holders who had
previously converted their notes.
The conversion of some or all of our outstanding 2.25% convertible senior notes due 2025 (the "2025 Notes") or our outstanding 2.25% convertible senior notes
due 2030 (the "2030 Notes") may dilute the ownership interests of our existing stockholders. Any sales in the public market of the common stock issuable upon
such conversion could adversely affect prevailing market prices of our common stock.
We may not have the ability to raise the funds necessary to settle conversions of our outstanding 2025 Notes and 2030 Notes in cash or to repurchase
the notes upon a fundamental change or on a repurchase date, as applicable, and our current debt contains, and our future debt may contain,
limitations on our ability to pay cash upon conversion or repurchase of the 2025 Notes or 2030 Notes.
Holders of our outstanding 2025 Notes and 2030 Notes have the right to require us to repurchase all or a portion of their 2025 Notes or 2030 Notes, as the case
may be, upon the occurrence of a fundamental change at a fundamental change repurchase price equal to 100% of the principal amount of the 2025 Notes or 2030
Notes, as the case may be, to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the 2030 Notes, we will be required to
make cash payments for each $1,000 in principal amount of 2030 Notes converted of at least the lesser of $1,000 and the sum of the daily conversion values as
described in the indenture governing the 2030 Notes. Our outstanding 2025 Notes contain similar provisions concerning the holders’ rights to require us to
repurchase their 2025 Notes upon a fundamental change and to pay cash to settle conversions of their 2025 Notes. However, we may not have enough available
cash or be able to obtain financing at the time we are required to make repurchases of the 2030 Notes or the 2025 Notes surrendered therefor or notes being
converted. In addition, our ability to repurchase the 2025 Notes or the 2030 Notes or to pay cash upon conversions of the 2025 Notes or 2030 Notes may be
limited by law, by regulatory authority or by agreements governing our existing and future indebtedness, as described below.
For example, our credit facility in effect from time to time may prohibit us from making any cash payments on the conversion or repurchase of the 2025 Notes or
the 2030 Notes, as the case may be, upon a fundamental change repurchase if, after giving effect to such conversion or repurchase (and any additional
indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with the applicable financial covenants under
that facility. Any new credit facility into which we may enter may have similar restrictions unless certain conditions are met. Our failure to make cash payments
upon the conversion or repurchase of the 2025 Notes or the 2030 Notes, as the case may be, as required under the terms of the applicable indenture governing
such notes would permit holders of the 2025 Notes or the 2030 Notes, as the case may be, to accelerate our obligations under the 2025 Notes or the 2030
Notes, as the case may be.
Our failure to repurchase the 2025 Notes or 2030 Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on
future conversions of the 2025 Notes or the 2030 Notes as required by the applicable indenture would constitute a default under such indenture. A default under
such indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness, including our credit
facility. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay
the indebtedness and repurchase the notes or make cash payments upon conversions thereof.
The conditional conversion feature of our outstanding 2025 Notes and 2030 Notes, if triggered, may adversely affect our financial condition and
operating results.
In the event the conditional conversion feature of the 2025 Notes or 2030 Notes is triggered, holders of such notes will be entitled to convert the notes at any time
during specified periods at their option. If one or more holders elect to convert their notes, we would be required to settle any converted principal through the
payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their notes, we could be required under applicable
accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material
reduction of our net working capital.
Certain provisions in the indentures governing the 2025 Notes and 2030 Notes could delay or prevent an otherwise beneficial takeover or takeover
attempt of us.
Certain provisions in the 2025 Notes and 2030 Notes and the applicable indenture could make it more difficult or more expensive for a third party to acquire us.
For example, if a takeover would constitute a fundamental change, holders of the notes will have the right to require us to repurchase their notes in cash. In addition,
if a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection
with such takeover. In either case, and in other cases, our obligations under the notes and the applicable indenture could increase the cost of acquiring us or
otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of the notes or holders of our
common stock may view as favorable.
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The capped call transactions may affect the market price of our common stock.
In connection with the pricing of, and the initial purchasers’ exercise in full of their option to purchase additional, 2030 Notes, we entered into capped call
transactions with the option counterparties. The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion
of any 2030 Notes and to offset any cash payments made in excess of the principal amount of converted 2030 Notes, as the case may be, with such reduction
and/or offset subject to a cap.
In connection with establishing their initial hedges of the capped call transactions, we expect the option counterparties or their respective affiliates to have purchased
shares of our common stock and/or entered into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of
the 2030 Notes. In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various
derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following
the pricing of the 2030 Notes and prior to the maturity of the 2030 Notes (and are likely to do so on each exercise date for the capped call transactions or
following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the 2030 Notes). This
activity could cause or avoid an increase or decrease in the market price of our common stock.
In addition, if any such capped call transactions fail to become effective, the option counterparties or their respective affiliates may unwind their hedge positions with
respect to our common stock, which could adversely affect the value of our common stock.
We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the
price of our common stock. In addition, we do not make any representation that the option counterparties will engage in these transactions or that these
transactions, once commenced, will not be discontinued without notice.
We are subject to counterparty risk with respect to the capped call transactions.
The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions. Our
exposure to the credit risk of the option counterparties will not be secured by any collateral. Past global economic conditions have resulted in the actual or
perceived failure or financial difficulties of many financial institutions. If an option counterparty becomes subject to insolvency proceedings, we will become an
unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty. Our
exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our
common stock. In addition, upon a default by an option counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock.
We can provide no assurance as to the financial stability or viability of the option counterparties.
Anti-takeover defenses in our amended and restated certificate of incorporation, our amended and restated bylaws and under Delaware law may impede
or discourage a merger, a takeover attempt or other business combinations, which could also reduce the market price of our common stock.
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of
us, even if a change in control would be beneficial to our existing stockholders. Our amended and restated certificate of incorporation and amended and restated
bylaws also contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to
elect directors that are not nominated by the current members of our Board of Directors or take other corporate actions, including effecting changes in our
management. These provisions include:
•
•
•
•
•
•
the provision that our Class B common stock is generally entitled to ten votes per share, while our common stock is entitled to one vote per share, enabling
the holders of our Class B common stock to effectively control the outcome of substantially all matters submitted to a vote of our stockholders, including the
election of directors and change of control transactions;
the provision establishing a classified board of directors with three-year staggered terms and the provision that a director may be removed only for cause,
each of which could delay the ability of stockholders to change the membership of a majority of our board of directors;
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and
voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal
of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
the requirement that a special meeting of stockholders may be called only by the directors or by any officer instructed by the directors to call the meeting,
which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and
the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an
unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt.
22
In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law. This statute prohibits a Delaware corporation
listed on a national securities exchange from engaging in a business combination with an interested stockholder (generally a person who, together with its affiliates,
owns or within the last three years has owned 15% or more of our voting stock subject to certain exceptions) for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The application of
Section 203 also could have the effect of delaying or preventing a change in control of us. Any of these provisions could, under certain circumstances, depress the
market price of our common stock.
The ability of our board of directors or a committee thereof to create and issue a new series of preferred stock and certain provisions of Delaware law and our
certificate of incorporation and bylaws could impede a merger, takeover attempt or other business combination involving us or discourage a potential acquirer from
making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock.
Risks related to the spin-off of the Vishay Precision Group
Vishay Precision Group is using the Vishay name under license from us, which could result in product and market confusion or the loss of certain of our
rights to the Vishay name.
VPG has a worldwide, perpetual and royalty-free license from us to use the “Vishay” mark as part of its corporate name and in connection with the manufacture,
sale, and marketing of the products and services that comprise its measurements and foil resistors businesses. The license of the Vishay name to VPG is important
to VPG because the success of VPG depends on the reputation of the Vishay brand for these products and services built over many years. Nonetheless, there
exists the risk that the use by VPG could cause confusion in the marketplace over the products of the two companies, that any negative publicity associated with a
product or service of VPG following the spin-off could be mistakenly attributed to our company or that we could lose our own rights to the “Vishay” mark if we fail
to impose sufficient controls on VPG’s use of the mark.
General Risk Factors
In addition to the risks relating specifically to our business, a variety of other factors relating to general conditions could cause actual results, performance, or
achievements to differ materially from those expressed in any of our forward-looking statements. These factors include:
•
•
•
•
•
•
•
overall economic and business conditions;
competitive factors in the industries in which we conduct our business;
changes in governmental regulation;
changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations;
changes in GAAP or interpretations of GAAP by governmental agencies and self-regulatory groups;
interest rate fluctuations, foreign currency rate fluctuations, and other capital market conditions; and
economic and political conditions in international markets, including governmental changes and restrictions on the ability to transfer capital across borders.
Our common stock, traded on the New York Stock Exchange, has in the past experienced, and may continue to experience, significant fluctuations in price and
volume. We believe that the financial performance and activities of other publicly traded companies in the electronic component industry could cause the price of
our common stock to fluctuate substantially without regard to our operating performance.
We operate in a continually changing business environment, and new factors emerge from time to time. Other unknown and unpredictable factors also could have a
material adverse effect on our future financial condition and results of operations.
23
Item 1B.
None.
Item 1C.
UNRESOLVED STAFF COMMENTS
CYBERSECURITY
We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. These risks include, among other things:
operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
We are committed to maintaining robust governance and oversight of these risks and to implementing mechanisms, controls, technologies, and processes designed
to help us assess, identify, and manage these risks. While we have not, as of the date of this Form 10-K, experienced a cybersecurity threat or incident that resulted
in a material adverse impact to our business or operations, there can be no guarantee that we will not experience such an incident in the future. Such incidents,
whether or not successful, could result in us incurring significant costs related to, for example, rebuilding our internal systems, writing down inventory value,
implementing additional threat protection measures, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers
with incentives to maintain a business relationship with us, or taking other remedial steps with respect to third parties, as well as incurring significant reputational
harm. In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate
preventative measures. Based on media reports and other surveys, we believe there is a general increase in cyberattack volume, frequency, and sophistication.
We have experienced the same in our own business. We seek to detect and investigate unauthorized attempts and attacks against our network and to prevent their
occurrence and recurrence where practicable through changes or updates to our internal processes and tools; however, we remain potentially vulnerable to known
or unknown threats. In some instances, we, our suppliers, and our customers can be unaware of a threat or incident or its magnitude and effects. Further, there is
increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational
harm. See "Risk Factors" for more information on our cybersecurity risks.
We aim to incorporate industry best practices throughout our cybersecurity program. Identifying and assessing cybersecurity risk is integrated into our overall risk
management program. Our cybersecurity strategy focuses on implementing effective and efficient controls, technologies, and other processes to assess, identify, and
manage material cybersecurity risks. Our cybersecurity program is designed to be aligned with applicable industry standards and is tested annually by independent
third-party consultants. We have processes in place to assess, identify, manage, and address material cybersecurity threats and incidents. These include, among
other things: annual and ongoing security awareness training for employees; mechanisms to detect and monitor unusual network activity; and containment and
incident response tools. We monitor issues that are internally discovered or externally reported that may affect us, and have processes to assess those issues for
potential cybersecurity impact or risk.
Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Our Audit Committee is responsible for
the oversight of risks from cybersecurity threats. Members of the Audit Committee receive updates on at least an annual basis from senior management, including
leaders from our Information Technology, Internal Audit, and Legal teams regarding matters of cybersecurity. This includes existing and new cybersecurity risks,
status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security
initiatives. Our Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our
cybersecurity risk management and strategy programs.
Our cybersecurity risk management and strategy processes are overseen by leaders from our Information Technology, Internal Audit, and Legal teams. Such
individuals have an average of over 20 years of prior work experience in various roles involving information technology, security, auditing, legal, compliance,
systems and programming. These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents
through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our
incident response plan, and report to the Audit Committee on any appropriate items.
24
Item 2.
PROPERTIES
At December 31, 2023, our business had 57 manufacturing locations. Our manufacturing facilities include owned and leased locations. Some locations include both
owned and leased facilities in the same location. The list of manufacturing facilities below excludes former manufacturing facilities that are not presently used for
manufacturing activities.
In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our present needs. Owning many of
our manufacturing facilities provides us meaningful financial and operating benefits, including long-term stability and a necessary buffer for economic downturns. We
do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
The principal locations of our owned manufacturing facilities, along with available space including administrative offices, are as follows:
Owned Locations
Business Segment
Approx. Available Space
(Square Feet)
United States
Columbus, NE
Bennington, VT
Yankton, SD
Warwick, RI
Niagara Falls, NY
Marshall, MN
Non-U.S.
Vocklabruck, Austria
People's Republic of China
Tianjin
Shanghai
Xi'an
Czech Republic
Blatna
Dolni Rychnov
Prachatice
Volary
France
Nice
Chateau Gontier
Hyeres
Germany
Selb
Heide
Landshut
Fichtelberg
Budapest, Hungary
Loni, India
Israel
Dimona
Migdal Ha'Emek
Be'er Sheva
Turin, Italy
Miharu, Japan
Melaka, Malaysia
Juarez, Mexico
Famalicao, Portugal
Republic of China (Taiwan)
Taipei
Kaohsiung
Resistors
Capacitors
Inductors
Resistors
Resistors
Inductors
Diodes
Diodes
Diodes
MOSFETs and Diodes
Resistors and Capacitors
Resistors and Capacitors
Capacitors
Resistors
Resistors
Resistors
Resistors
Resistors and Capacitors
Resistors
Capacitors
Resistors
Diodes
Resistors and Capacitors
Resistors and Capacitors
Capacitors
Resistors, Inductors and Capacitors
Diodes
Capacitors
Optoelectronic Components
Resistors
Capacitors
Diodes
MOSFETs
201,000
64,000
60,000
56,000
34,000
22,000
100,000
397,000
195,000
133,000
276,000
183,000
92,000
35,000
221,000
82,000
59,000
472,000
264,000
75,000
36,000
101,000
405,000
404,000
288,000
276,000
102,000
165,000
156,000
75,000
222,000
366,000
105,000
25
The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are as follows:
Leased Locations
Business Segment
United States
Approx. Available Space
(Square Feet)
Columbus, NE
Attleboro, MA
Ontario, CA
Dover, NH
East Windsor, CT
Hollis, NH
Fremont, CA
Glendale, WI
Hudson, MA
Montevideo, MN
Duluth, MN
Non-U.S.
Klagenfurt, Austria
People’s Republic of China
Danshui
Shanghai
Shatian
Zhuhai
Long Xi
Santo Domingo, Dominican Republic
Germany
Itzehoe
Heilbronn
Selb
Mumbai, India
Mexico
Juarez
Durango
Mexicali
Manila, Philippines
Kaohsiung, Republic of China (Taiwan)
Resistors
Resistors
Resistors
Inductors
Resistors
Resistors
Resistors
Resistors
Resistors
Inductors
Inductors
Capacitors
Capacitors, Inductors, and Resistors
MOSFETs
Capacitors and Resistors
Inductors
Resistors
Inductors
MOSFETs
Diodes and Optoelectronic Components
Capacitors
Diodes
Resistors
Inductors
Resistors
Optoelectronic Components
Diodes
87,000
40,000
38,000
35,000
30,000
25,000
18,000
14,000
13,000
11,000
10,000
150,000
446,000
300,000
218,000
179,000
36,000
44,000
217,000
163,000
47,000
34,000
314,000
200,000
15,000
149,000
130,000
26
Item 3. LEGAL PROCEEDINGS
From time to time we are involved in routine litigation incidental to our business. Management believes that such matters, either individually or in the aggregate,
should not have a material adverse effect on our business or financial condition.
Intellectual Property Matters
We are engaged in discussions with various parties regarding patent licensing and cross patent licensing issues. In addition, we have observed that in the current
business environment, electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims against
competitors. When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights through legal action, and
we intend to continue to do so.
Environmental Matters
Vishay is involved in environmental remediation programs at various sites currently or formerly owned by Vishay and its subsidiaries both within and outside of the
U.S., in addition to involvement as a potentially responsible party (“PRP”) at Superfund sites. Certain obligations as a PRP have arisen in connection with business
acquisitions. The remediation programs are on-going and the ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the
required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. See also Note 13 to our consolidated financial statements.
Vishay GSI, Inc. (“VGSI”), a wholly owned subsidiary of the Company, is a direct defendant in two separate, but related, litigation matters: (1) 101 Frost Street
Associates, L.P. v. United States Department of Energy et al.; and (2) Hicksville Water District v. United States Department of Energy, et al. VGSI was
also a third-party defendant in a third related matter, United States v Island Transportation Corp. et al. On September 12, 2022, the United States District
Court for the Eastern District of New York dismissed all third-party complaints commenced by Island Transportation Corp. against nineteen third-party defendants
including VGSI. The two remaining cases are pending in the United States District Court for the Eastern District of New York.
The two remaining cases contain claims for recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), and allege that a predecessor’s manufacturing operations in Hicksville, New York (the “Site”), between 1960 and 1993, impacted groundwater
beneath and downgradient of the Site. The groundwater beneath and downgradient of the Site is part of the New Cassel/Hicksville Groundwater Contamination
Site, which was added to the National Priorities List pursuant to CERCLA on September 15, 2011. The Company is vigorously contesting plaintiff’s claims and
will aggressively prosecute its affirmative claims.
VGSI was served in August 2023 with a complaint brought by the Hicksville Water District against multiple defendants. The matter, Hicksville Water District
v. Alsy Manufacturing, Inc., is pending in the Supreme Court of the State of New York, County of Nassau. As with two other previously reported cases
pending in the United States District Court for the Eastern District of New York, the newest case contains claims for recovery of response costs under CERCLA,
and alleges that a predecessor’s manufacturing operations in the Site, between 1960 and 1993, impacted groundwater beneath and downgradient of the Site.
VGSI is vigorously contesting plaintiff’s claims and will aggressively prosecute its affirmative claims.
On August 31, 2023, Vishay was notified by the U.S. Environmental Protection Agency ("EPA") of potential violations of the Resource Conservation and
Recovery Act and the Solid Waste Disposal Act. The alleged violations relate to the handling, storage, inspection, and labeling of hazardous waste at Vishay's
facility located in Columbus, Nebraska. Vishay has reached an agreement with the EPA, subject to execution of and finalization of the Consent Agreement,
including the filing and ratification of the Consent Agreement, including the filing and ratification of the Consent Agreement by the Regional Hearing Clerk for EPA,
Region 7, to settle this matter for a civil penalty of $387,000 and committing to submit quarterly compliance reports to the EPA for one year. Vishay admits no
violation of any law or regulation under the agreement. The Company does not expect the matter or its settlement as proposed to have a material effect on its
financial condition or results of operations.
Item 4. MINE SAFETY DISCLOSURES
None.
27
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following table sets forth certain information regarding our executive officers as of February 16, 2024:
Name
Marc Zandman*
Joel Smejkal*
Lori Lipcaman
Jeff Webster
Roy Shoshani
Peter Henrici
Michael O'Sullivan
* Member of the Executive Committee of the Board of Directors.
Age
62
57
66
53
50
68
49
Positions Held
Executive Chairman of the Board, Chief Business Development Officer,
and President, Vishay Israel Ltd.
Chief Executive Officer, President, and Director
Executive Vice President and Chief Financial Officer
Executive Vice President - Chief Operating Officer
Executive Vice President - Chief Technical Officer
Executive Vice President - Corporate Development
Executive Vice President - Chief Administrative and Legal Officer
Marc Zandman was appointed Executive Chairman of the Board and Chief Business Development Officer effective June 5, 2011. Mr. Zandman has served as a
Director of Vishay since 2001 and President of Vishay Israel Ltd. since 1998. Mr. Zandman previously was Vice Chairman of the Board from 2003 to June 2011,
and Chief Administration Officer from 2007 to June 2011. Mr. Zandman was Group Vice President of Vishay Measurements Group from 2002 to 2004. Mr.
Zandman has served in various other capacities with Vishay since 1984. He is the son of the late Dr. Felix Zandman, Vishay’s Founder. Mr. Zandman controls, on
a shared basis with Ruta Zandman and Ziv Shoshani, approximately 35.0% of the total voting power of our capital stock as of December 31, 2023. He also
serves on the Board of Directors of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from Vishay Intertechnology in 2010
(including as non-executive Chair from 2010 - 2022).
Joel Smejkal was appointed President and Chief Executive Officer effective January 1, 2023. Mr. Smejkal served as Executive Vice President, Corporate
Business Development from 2020-2022. He has held various positions of increasing responsibility since joining Vishay in 1990, including Executive Vice President,
Business Head Passive Components (2017-2020) and Senior Vice President Global Distribution Sales (2012-2016). His experience with Vishay includes
worldwide and divisional leadership roles in engineering, marketing, operations, and sales.
Lori Lipcaman was appointed Executive Vice President and Chief Financial Officer of the Company effective September 1, 2011. Ms. Lipcaman had been
appointed Executive Vice President Finance and Chief Accounting Officer in September 2008. Previously, she served as Vishay’s Corporate Senior Vice
President, Operations Controller, from March 1998 to September 2008. Prior to that, she served in various positions of increasing responsibility in finance and
controlling since joining the Company in May 1989.
Jeff Webster was appointed Executive Vice President - Chief Operating Officer effective January 1, 2023. Mr. Webster served as Executive Vice President,
Business Head Passive Components from 2020-2022. He has held various positions of increasing responsibility since joining Vishay in 2000, including Senior Vice
President Global Quality (2014-2019) and Vice President Global Quality – Actives (2000-2014).
Roy Shoshani was appointed Executive Vice President – Chief Technical Officer effective January 1, 2023. Mr. Shoshani has held various positions of increasing
responsibility since joining Vishay in 2004, including Deputy to the Chief Technical Officer (2021-2022), Vice President Integrated Circuits Division (2009-2022),
and Vice President R&D – Semiconductors (2019-2021). Prior to joining Vishay, Mr. Shoshani worked for Harmonic. Mr. Shoshani’s experience with Vishay
includes divisional leadership roles in R&D, marketing, business development and operations.
Peter Henrici was appointed Executive Vice President – Corporate Development effective January 1, 2023 and has served as Corporate Secretary since 2012.
Mr. Henrici has held various positions in marketing communications, investor relations, and corporate treasury departments since joining Vishay in 1998. Mr.
Henrici has been responsible for corporate communications since 2005.
Michael O'Sullivan was appointed Executive Vice President - Chief Administrative and Legal Officer effective January 1, 2024. Mr. O’Sullivan previously served
as Corporate General Counsel since joining the Company in 2012. In July 2016, Mr. O'Sullivan was appointed Regional Country Manager - The Americas. Prior
to joining Vishay, Mr. O'Sullivan worked as an in-house corporate attorney for a subsidiary of Koch Industries, Inc., and in private practice at DLA Piper.
28
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF
EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the symbol VSH. The following table sets forth the high and low sales prices for our common
stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters. Holders of record of our common stock totaled
approximately 1,000 at February 14, 2024. Because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders,
we are unable to estimate the total number of beneficial owners represented by these stockholders of record.
In 2014, the Company's Board of Directors instituted a quarterly cash dividend program and declared the first cash dividend in the history of Vishay. Quarterly
cash dividends have been paid in each quarter since the first fiscal quarter of 2014. We expect to continue to pay quarterly dividends, although the amount and
timing of any future dividends remains subject to authorization of our Board of Directors.
The following table sets forth, for the indicated periods, the high and low sales prices of our common stock and the quarterly cash dividends declared.
Fourth quarter
Third quarter
Second quarter
First quarter
Common stock price range
2023
2022
Dividends declared
per share
High
Low
High
Low
2023
2022
$
$
$
$
25.22
30.10
29.66
24.48
$
$
$
$
21.15
24.03
20.57
20.51
$
$
$
$
23.39
21.58
20.91
22.71
$
$
$
$
17.63
16.73
17.13
17.58
$
$
$
$
0.10
0.10
0.10
0.10
$
$
$
$
0.10
0.10
0.10
0.10
At February 14, 2024, we had outstanding 12,097,148 shares of Class B common stock, par value $.10 per share, each of which entitles the holder to ten votes.
The Class B common stock generally is not transferable except in certain very limited instances, and there is no market for those shares. The Class B common
stock is convertible, at the option of the holder, into common stock on a share for share basis. As a result of the passing of our founder and former Executive
Chairman, Dr. Felix Zandman, Mrs. Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman
(our Executive Chairman) and Ziv Shoshani (a member of our Board of Directors) approximately 89.7% of our Class B common stock and 44.0% of the total
voting power of our capital stock as of December 31, 2023.
Certain of our debt obligations contain restrictions as to the payment of cash dividends. See "Financial Condition, Liquidity, and Capital Resources" included in
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.
The Stockholder Return Policy calls for us to return a prescribed amount of cash flows on an annual basis. We intend to return such amounts directly, in the form of
dividends, or indirectly, in the form of stock repurchases. We paid $55.6 million of dividends to stockholders and repurchased $78.7 million of our stock pursuant
to the Stockholder Return Policy in 2023.
To enable the operation of the Stockholder Return Policy, Vishay's Board of Directors approves the repurchase of a stated number of shares of common stock
from time-to-time. As of September 30, 2023, approximately 1.3 million shares remained from the previous repurchase authorization of 6.0 million shares. On
November 28, 2023, Vishay's Board of Directors approved the repurchase of an additional 2.5 million shares of common stock, to enable the operation of the
Stockholder Return Policy for the foreseeable future.
The following table provides information regarding repurchases of our common stock during the fiscal quarter ended December 31, 2023:
Period
October 1 - October 28
October 29 - November 25
November 26 - December 31
Total
Total Number
of Shares
Purchased
Average Price
Paid per
Share
(including
commission)
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Program
Total Dollar
Amount
Purchased
Under the
Program
Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Program
254,985
309,914
336,540
901,439
$
$
23.92
22.63
23.50
23.32
254,985 $
6,099,333
309,914
7,013,513
7,910,080
336,540
901,439 $ 21,022,926
1,023,839
713,925
2,877,385
2,877,385
29
Stock Performance Graph
The line graph below compares the cumulative total stockholder return on Vishay’s common stock over a 5-year period with the returns on the Standard & Poor’s
MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor’s 500 Stock Index, and the Philadelphia Semiconductor Index. The line graph
assumes that $100 had been invested at December 31, 2018 and assumes that all dividends were reinvested.
Company Name / Index
Vishay Intertechnology, Inc.
S&P 500 Index
S&P MidCap 400 Index
Philadelphia Semiconductor Index
Base
Period
2018
100
100
100
100
Years Ending December 31,
2019
2020
2021
2022
120.66
131.49
126.20
163.26
120.03
155.68
143.44
250.87
128.98
200.37
178.95
358.37
129.84
164.08
155.58
233.37
2023
146.67
207.21
181.15
389.74
Comparison of Cumulative Five Year Total Return
$500
$400
$300
$200
$100
$0
12/31/18
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
Vishay Intertechnology, Inc.
S&P 500 Index
S&P MidCap 400 Index
Philadelphia Semiconductor Index
Item 6. RESERVED
Not applicable.
30 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis (“MD&A”) is intended to provide an understanding of Vishay's financial condition, results of operations
and cash flows by focusing on changes in certain key measures from year to year. The MD&A should be read in conjunction with our Consolidated
Financial Statements and accompanying Notes filed herewith, commencing on page F-1 of this report. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as
a result of various factors, including those discussed elsewhere in this Annual Report on Form 10-K, particularly in Item 1A. “Risk Factors.”
Overview
Vishay Intertechnology, Inc. ("Vishay," "we," "us," or "our") manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic
components that are essential to innovative designs in the automotive, industrial, computing, consumer, telecommunications, military, aerospace, and medical
markets.
We operate in six segments based on product functionality: MOSFETs, Diodes, Optoelectronic Components, Resistors, Inductors, and Capacitors.
We are focused on enhancing stockholder value by growing our business and improving earnings per share. Since 1985, we have pursued a business strategy of
growth through focused research and development and acquisitions. We plan to continue to grow our business through intensified internal growth supplemented by
opportunistic acquisitions, while maintaining a prudent capital structure. To drive growth and optimize stockholder value, we plan to capitalize on the mega trends
of e-mobility, sustainability, and connectivity through initiatives. We are developing go-to-market strategies and investing in and expanding the key product lines for
growth that we have identified. We have increased our capacity internally by investing approximately $329 million in 2023 and plan to invest approximately $1.2
billion in total from 2023 - 2025 primarily for capital expansion projects outside of China. In addition, we are strategically expanding our outsourced production of
commodity products to subcontractors. At the same time, we are enhancing our channel management while investing in internal resources by adding customer-
facing engineers and filling gaps in technology and market coverage. Taken together, each of these initiatives supports our Think Customer First organizational
culture.
On November 8, 2023, we and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility and
operations located in Newport, South Wales, U.K. for approximately $177 million in cash, subject to customary post-closing adjustments. The closing of the
transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024.
In addition to enhancing stockholder value through growing our business, in 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us
to return at least 70% of free cash flow, net of scheduled principal payments of long-term debt, on an annual basis. See further discussion in “Stockholder Return
Policy” below.
On September 12, 2023, we issued $750 million convertible senior notes due 2030. We used the net proceeds from the issuance of these notes to repurchase
$370.2 million principal amount of convertible senior notes due 2025, $94.2 million to enter into capped call transactions intended to mitigate the dilution risk of
convertible senior notes due 2030 by synthetically increasing the conversion price of the notes to approximately $43.98 per share, to repay amounts outstanding on
our amended and restated credit facility, and for other general corporate purposes. We recognized a loss of $18.9 million due to the early extinguishment of the
repurchased convertible senior notes due 2025.
On May 8, 2023, we amended and restated our $750 million revolving credit agreement, which replaced our credit agreement that was scheduled to mature in
June 2024. The amendment and restatement extended the maturity date of the revolving credit agreement until May 8, 2028, replaced the previous total leverage
ratio used for financial covenant compliance measurement with a net leverage ratio, and replaced the LIBOR-based interest rate and related LIBOR-based
mechanics applicable to U.S. dollar borrowings under the revolving credit agreement with an interest rate based on the Secured Overnight Financing Rate
("SOFR") (including a customary spread adjustment) and related SOFR-based mechanics. The maturity date of the credit facility will accelerate if within ninety-
one days prior to the maturity of our convertible senior notes due 2025, the outstanding principal amount of such notes exceeds a defined liquidity measure as set
forth in the credit facility. The repurchase of $370.2 million principal amount of convertible senior notes due 2025 in September 2023 substantially reduces the risk
of maturity date acceleration. Other terms and conditions are substantially unchanged.
Our business and operating results have been and will continue to be impacted by worldwide economic conditions. Our revenues are dependent on end markets
that are impacted by consumer and industrial demand, and our operating results can be adversely affected by reduced demand in those global markets. In this
volatile economic environment, we continue to closely monitor our fixed costs, capital expenditure plans, inventory, and capital resources to respond to changing
conditions and to ensure we have the management, business processes, and resources to meet our future needs. We will react quickly and professionally to
changes in demand to minimize manufacturing inefficiencies and excess inventory build in periods of decline and maximize opportunities in periods of growth. We
believe we have sufficient liquidity to withstand temporary disruptions in the economic environment. See additional information regarding our competitive strengths
and key challenges as disclosed in Part I.
31
We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog, book-to-bill ratio, inventory
turnover, change in average selling prices, net cash and short-term investments (debt), and free cash generation to evaluate the performance and assess the future
direction of our business. See further discussion in “Financial Metrics” and “Financial Condition, Liquidity, and Capital Resources” below. The key financial
metrics decreased in the fourth fiscal quarter of 2023 primarily due to the negative impacts of an on-going distributor inventory correction that resulted in lower
orders. Net revenues and margins decreased versus the prior year period primarily due to lower volume.
Net revenues for the year ended December 31, 2023 were $3.402 billion, compared to net revenues of $3.497 billion and $3.240 billion for the years ended
December 31, 2022 and 2021, respectively. Net earnings attributable to Vishay stockholders for the year ended December 31, 2023 were $323.8 million, or
$2.31 per diluted share, compared to $428.8 million, or $2.98 per diluted share, and $298.0 million, or $2.05 per share, for the years ended December 31, 2022
and 2021, respectively.
We define adjusted net earnings as net earnings determined in accordance with GAAP adjusted for various items that management believes are not indicative of the
intrinsic operating performance of our business. We define free cash as the cash flows generated from continuing operations less capital expenditures plus net
proceeds from the sale of property and equipment. The reconciliations below include certain financial measures which are not recognized in accordance with
GAAP, including adjusted net earnings, adjusted earnings per share, and free cash. These non-GAAP measures should not be viewed as alternatives to GAAP
measures of performance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, and free cash do not have uniform
definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies. Management believes that
adjusted net earnings and adjusted earnings per share are meaningful because they provide insight with respect to our intrinsic operating results. Management
believes that free cash is a meaningful measure of our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases
or dividends.
Net earnings attributable to Vishay stockholders for the years ended December 31, 2023, 2022, and 2021 include items affecting comparability. The items
affecting comparability are (in thousands, except per share amounts):
Years ended December 31,
2022
2023
2021
GAAP net earnings attributable to Vishay stockholders
$
323,820
$
428,810
$
297,970
Reconciling items affecting gross profit:
Impact of COVID-19 pandemic
Other reconciling items affecting operating income:
Impact of COVID-19 pandemic
Reconciling items affecting other income (expense):
Loss on early extinguishment of debt
Reconciling items affecting tax expense (benefit):
Effects of changes in uncertain tax positions
Effects of changes in valuation allowances
Effect of change in indefinite reversal assertion
Change in tax laws and regulations
Tax effects of pre-tax items above
Adjusted net earnings
$
$
$
$
-
$
6,661
$
-
$
546
$
18,874
$
-
$
$
-
-
-
-
(498)
$
(5,941)
(33,669)
59,642
-
(1,802)
$
342,196
$
454,247
$
-
-
-
-
(5,714)
-
45,040
-
337,296
Adjusted weighted average diluted shares outstanding
140,246
143,915
145,495
Adjusted earnings per diluted share
$
2.44
$
3.16
$
2.32
32
The following table reconciles gross profit by segment to consolidated gross profit. Direct costs of the COVID-19 pandemic are not allocated to the segments as
the chief operating decision maker's evaluation of segment performance does not include these costs (in thousands):
MOSFETS
Diodes
Optoelectronic Components
Resistors
Inductors
Capacitors
Unallocated gross profit (loss)
Gross profit
Years ended December 31,
2022
2021
2023
$
$
259,386
175,621
62,226
238,428
112,414
126,418
-
974,493
$
$
274,498
198,105
102,787
262,072
104,349
123,839
(6,661)
1,058,989
$
$
189,959
168,365
100,737
215,853
107,358
105,641
-
887,913
Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item on the face of our consolidated
statements of cash flows prepared in accordance with GAAP. Our free cash results are as follows (in thousands):
Years ended December 31,
2022
2023
2021
Net cash provided by continuing operating activities
Proceeds from sale of property and equipment
Less: Capital expenditures
Free cash
$
$
$
365,703
1,156
(329,410)
37,449
$
$
484,288
1,198
(325,308)
160,178
$
457,104
1,317
(218,372)
240,049
Orders are lower due to a distributor inventory correction that began in the fourth fiscal quarter of 2022 and continued throughout 2023. Our results for 2023
remained strong, although weaker than our 2022 results.
Our free cash results were significantly impacted by the installment payments of the U.S. transition tax of $27.7 million in 2023 and $14.8 million in 2022 and 2021,
respectively, and $63.6 million and $25.2 million of payments of foreign, withholding, and claw-back cash taxes on foreign earnings for the $276.8 million and
$81.2 million (net of taxes) that were repatriated to the U.S. in 2023 and 2022, respectively.
33
Growth and Company Transformation Initiatives
Effective January 1, 2023, a new executive leadership team, promoted from within, embarked on a new era at Vishay. The new executive management team laid
out a three-year plan to expand capacity to support our highest growth and highest return product lines and to position Vishay to be ready for the next phase of
megatrends in e-mobility, sustainability, and connectivity. The year 2023 is generally seen as the staging year for this plan, and all elements of the plan are
progressing throughout the organization. In 2024, we expect to advance many of these initiatives and begin to have increased manufacturing capacity available.
Beginning in late 2024 and into 2025, we expect to be in a better position to capture the next step in the growing demand for electrification in our key end-markets.
To focus this growth, we have identified product lines for growth across each reportable segment Most of these product lines serve multiple end-market segments,
applications, and business channels. We have developed go-to market strategies for each one of these product lines, concentrating our resources on improving the
technical performance of non-commodity and custom products, to better position Vishay to support the mega trends toward electrification and data
communications.
To be ready for this next phase of growth, we intend to invest a total of about $1.2 billion between 2023 and 2025. These projects include our new power
inductor site in Mexico; a resistor manufacturing expansion in Mexico; expanded 8" diode manufacturing in Taiwan and Turin, Italy; and the new MOSFET 12” fab
in Itzehoe, Germany. Our plan was to invest approximately $385 million in 2023; however, capital spending for 2023 came in at $329 million due to some delays
in delivery and installing equipment. We intend to carry over the remaining $56 million into 2024.
We have also expanded our external capacity, engaging in developing partnerships with subcontractors to outsource some commodity products and create
incremental capacity for our higher growth and higher return products. Each reportable segment is evaluating subcontractors, including supporting front-end
capacities for our semiconductor segments.
By growing capacity and capabilities, we are also enhancing our ability to support all the business channels of OEM, distribution, and EMS, while maximizing the
profitability of each one through a focus on higher margin customers.
At the same time, we are focusing on increasing our technical resources, adding additional customer-facing engineers, and intensifying our activities in R&D. We
have seen and will continue to see an increase in operating expenses over the next couple of years as we add these engineering talents, fill gaps in our technology,
and become a preferred supplier to more customers and more broadly sell our product portfolio. This includes investments in technology, including enhanced
Customer Relationship Management and planning tools, to improve our operational excellence.
The acquisition of MaxPower and its silicon carbide technology in 2022 is an illustration of this increased investment. During the fourth fiscal quarter, we released
our 1,200-volt silicon carbide ("SiC") planar MOSFETs. We are planning to have the SiC package types for three different resistance and current capabilities
available during the first half of 2024. In parallel, we continue to advance the development of the 1,200-volt dual-trench technology, the 1,700-volt planar
technology, and the 650-volt planar technology. We plan to utilize our pending acquisition of the Newport wafer fab as the home for MaxPower to further develop
and scale our SiC capabilities.
Another area of focus is our introduction of solution selling, speaking to customer engineers about applications and the performance improvement that Vishay
components can bring, from the full array of our portfolio. Customer engineers look for suppliers who can provide solutions to advance their
technologies. Vishay’s semiconductors and passive components can populate greater than 80% of the components on the circuit board in many applications.
All of this is being done as we implement organizational and structural change at Vishay, focused on a “Think Customer First” philosophy, and becoming a more
responsive company. We are fostering collaboration internally and externally, particularly in the functions connected to customer programs. To facilitate that
change internally, we re-designed our short- and long-term incentive plans to align the performance of about 1,000 key employees with Company growth and
profitability objectives and stockholder interests. The equity-based plan was approved by our stockholders at our 2023 annual meeting.
These initiatives are the foundation for our ambitions to unleash the potential at Vishay, realizing the full value of our broad product portfolio and becoming a
customer-first company, and for our goals of driving top line growth, expanding margins and optimizing returns.
34
Stockholder Return Policy
In 2022, our Board of Directors adopted a Stockholder Return Policy, which calls for us to return at least 70% of free cash flow, net of scheduled principal
payments of long-term debt, on an annual basis. We intend to return such amounts to stockholders directly, in the form of dividends, or indirectly, in the form of
stock repurchases.
The following table summarizes activity pursuant to this policy (in thousands):
Dividends paid to stockholders
Stock repurchases
Total
Years ended
December 31,
2023
December 31,
2022
$
$
55,626
78,684
134,310
$
$
57,187
82,972
140,159
During the fourth quarters of 2022 and 2021, we determined that substantially all unremitted foreign earnings in Germany and Israel, respectively, are no longer
indefinitely reinvested. The changes in these indefinite reinvestment assertions will provide greater access to our worldwide cash balances to fund our growth plan
and our Stockholder Return Policy, but also increased our effective tax rate.
The structure of our Stockholder Return Policy enables us to allocate capital responsibly among our business, our lenders, and our stockholders. We will continue
to invest in growth initiatives including key product line expansions, targeted R&D, and synergistic acquisitions.
We have paid dividends each quarter since the first quarter of 2014, and the Stockholder Return Policy will remain in effect until such time as the Board votes to
amend or rescind the policy. Implementation of the Stockholder Return Policy is subject to future declarations of dividends by the Board of Directors, market and
business conditions, legal requirements, and other factors. The policy sets forth our intention, but does not obligate us to acquire any shares of common stock or
declare any dividends, and the policy may be terminated or suspended at any time at our discretion, in accordance with applicable laws and regulations.
35
Financial Metrics
We utilize several financial metrics to evaluate the performance and assess the future direction of our business. These key financial measures and metrics include net
revenues, gross profit margin, operating margin, segment operating income, segment operating margin, end-of-period backlog, and the book-to-bill ratio. We also
monitor changes in our inventory turnover and our or publicly available average selling prices (“ASP”).
Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs of products sold, but also deducts
certain other period costs, particularly losses on purchase commitments and inventory write-downs. Losses on purchase commitments and inventory write-downs
have the impact of reducing gross profit margin in the period of the charge, but result in improved gross profit margins in subsequent periods by reducing costs of
products sold as inventory is used. We also regularly evaluate gross profit by segment to assist in the analysis of consolidated gross profit. Gross profit margin and
gross profit margin by segment are clearly a function of net revenues, but also reflect our cost management programs and our ability to contain fixed costs.
Operating margin is computed as gross profit less operating expenses, expressed as a percentage of net revenues. Operating margin is clearly a function of net
revenues, but also reflects our cost management programs and our ability to contain fixed costs.
Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment operating income. Only
dedicated, direct selling, general, and administrative ("SG&A") expenses of the segments are included in the calculation of segment operating income. We do not
allocate certain SG&A expenses that are managed at the regional or corporate global level to our segments. Accordingly, segment operating income excludes
these SG&A expenses that are not directly traceable to the segments. Segment operating income would also exclude costs not routinely used in the management of
the segments in periods when those items are present, such as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items
affecting comparability. Segment operating income is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain
fixed costs. Segment operating margin is segment operating income expressed as a percentage of net revenues.
End-of-period backlog is one indicator of future revenues. We include in our backlog only open orders that we expect to ship in the next twelve months. If demand
falls below customers’ forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipments that are included in our
backlog, in many instances without the payment of any penalty. Therefore, the backlog is not necessarily indicative of the results to be expected for future periods.
An important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during a period as compared with the
product that we ship during that period. A book-to-bill ratio that is greater than one indicates that our backlog is building and that we are likely to see increasing
revenues in future periods. Conversely, a book-to-bill ratio that is less than one is an indicator of declining demand and may foretell declining revenues.
We focus on our inventory turnover as a measure of how well we are managing our inventory. We define inventory turnover for a financial reporting period as our
costs of products sold for the four fiscal quarters ending on the last day of the reporting period divided by our average inventory (computed using each fiscal
quarter-end balance) for this same period. A higher level of inventory turnover reflects more efficient use of our capital.
Pricing in our industry can be volatile. Using our and publicly available data, we analyze trends and changes in average selling prices to evaluate likely future pricing.
The erosion of average selling prices of established products is typical for semiconductor products. We attempt to offset this deterioration with ongoing cost
reduction activities and new product introductions. Our specialty passive components are more resistant to average selling price erosion. All pricing is subject to
governing market conditions and is independently set by us.
36
The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. The following table shows net
revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventory turnover, and changes in ASP for our business as a whole
during the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023 (dollars in thousands):
Net revenues
Gross profit margin
Operating margin
End-of-period backlog
Book-to-bill ratio
Inventory turnover
Change in ASP vs. prior quarter
_______________
4th Quarter
2022
1st Quarter
2023
2nd Quarter
2023
3rd Quarter
2023
4th Quarter
2023
$
855,298
$
871,046
$
892,110
$
853,653
$
785,236
29.1%
15.8%
32.0%
18.2%
28.9%
27.8%
15.1%
13.5%
25.6%
9.9%
$
2,292,700
$
2,169,400
$
1,895,100
$
1,552,400
$
1,381,800
0.94
3.9
0.84
3.7
0.69
3.9
0.63
3.7
0.75
3.6
0.6%
1.2%
(0.7)%
(0.8)%
(0.7)%
See “Financial Metrics by Segment” below for net revenues, book-to-bill ratio, and gross profit margin by segment.
Revenues decreased versus the fourth fiscal quarter of 2022 and versus the prior fiscal quarter primarily due to lower sales volume. The book-to-bill ratio and
backlog were negatively impacted by the distributor inventory correction that began in 2022 and continued through 2023. We continue to increase manufacturing
capacity for critical product lines. Average selling prices decreased versus the fourth fiscal quarter of 2022 and prior fiscal quarter.
Gross profit margin decreased versus the prior fiscal quarter and prior year quarter primarily due to lower volume.
The book-to-bill ratio in the fourth fiscal quarter of 2023 increased to 0.75 versus 0.63 in the third fiscal quarter of 2023.
37
Financial Metrics by Segment
The following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segment for the five fiscal quarters
beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023 (dollars in thousands):
MOSFETs
Net revenues
Book-to-bill ratio
Gross profit margin
4th Quarter
2022
1st Quarter
2023
2nd Quarter
2023
3rd Quarter
2023
4th Quarter
2023
$
206,005
$
198,181
$
207,388
$
205,027
$
168,158
1.15
0.95
0.68
0.50
37.5%
36.8%
34.7%
33.5%
Segment operating margin
30.9%
29.3%
27.4%
25.7%
Diodes
Net revenues
Book-to-bill ratio
Gross profit margin
Segment operating margin
Optoelectronic Components
Net revenues
Book-to-bill ratio
Gross profit margin
$
181,791
$
175,693
$
174,735
$
176,788
$
163,324
0.88
0.71
0.54
0.58
23.4%
27.4%
23.4%
26.7%
19.9%
24.3%
20.1%
23.5%
0.61
24.1%
20.9%
$
63,985
$
60,403
$
64,449
$
64,441
$
53,853
0.78
0.72
0.70
0.57
0.59
28.1%
36.3%
24.2%
28.1%
12.1%
Segment operating margin
20.1%
28.6%
16.7%
20.3%
3.4%
Segment operating margin
25.3%
29.9%
25.8%
20.9%
Resistors
Net revenues
Book-to-bill ratio
Gross profit margin
Inductors
Net revenues
Book-to-bill ratio
Gross profit margin
$
205,161
$
223,140
$
222,433
$
199,877
$
198,022
0.85
0.88
0.74
0.65
28.3%
33.2%
29.1%
24.6%
$
75,198
$
80,338
$
89,239
$
89,947
$
87,868
0.83
1.04
0.84
0.85
32.1%
29.5%
34.5%
31.7%
Segment operating margin
28.9%
26.1%
30.9%
27.9%
Capacitors
Net revenues
Book-to-bill ratio
Gross profit margin
Segment operating margin
_________
$
123,158
$
133,291
$
133,866
$
117,573
$
114,011
0.99
0.70
0.70
0.75
23.7%
28.5%
25.1%
22.1%
19.9%
24.8%
21.0%
17.5%
0.95
25.3%
20.4%
0.62
27.3%
16.8%
0.82
25.6%
22.0%
0.91
33.4%
29.6%
38
Acquisition Activity
As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition
targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company
has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and
commercialize, such as MaxPower Semiconductor, Inc. ("MaxPower"), acquired in 2022, and key niche suppliers to vertically integrate our supply chain, such as
Centerline Technologies, LLC, acquired in 2023. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition
debt would exceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization (“EBITDA”). For these purposes, we calculate pro forma
EBITDA as the adjusted EBITDA of Vishay and the target for Vishay’s four preceding fiscal quarters, with a pro forma adjustment for savings which management
estimates would have been achieved had the target been acquired by Vishay at the beginning of the four fiscal quarter period.
On November 8, 2023, we and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility and
operations located in Newport, South Wales, U.K. for approximately $177 million in cash, subject to customary post-closing adjustments. The closing of the
transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024.
On October 28, 2022, we acquired MaxPower, a San Jose, California-based fabless power semiconductor provider dedicated to delivering innovative and cost-
effective technologies that optimize power management solutions. MaxPower's proprietary device structures and process techniques provide leading edge silicon
and SiC MOSFET products. Its SiC product development targets automotive and industrial applications. We paid cash of $50.0 million, net of cash acquired, at
closing. The transaction also included possible contingent payments of up to $57.5 million, which would be payable upon the achievement of certain technology
milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the disposition of MaxPower's investment in an equity
affiliate. One of the contingencies was resolved in the fourth fiscal quarter of 2023, which resulted in no additional payments to the former employees and
stockholders of MaxPower. Significant developments occurred in another of the contingencies in January 2024. Our estimate of the maximum possible contingent
payments is $17.5 million. MaxPower is included in our MOSFETs segment. The inclusion of this acquisition did not have a material impact on the Company's
consolidated results for the years ended December 31, 2023 and 2022.
There is no assurance that we will be able to close the transaction for the Nexperia wafer fabrication facility, or identify and acquire additional suitable acquisition
candidates at price levels and on terms and conditions we consider acceptable.
See Note 2 to our consolidated financial statements.
39
Cost Management
We place a strong emphasis on controlling our costs, and use various measures and metrics to evaluate our cost structure.
We define variable costs as expenses that vary with respect to quantity produced. Fixed costs do not vary with respect to quantity produced over the relevant time
period. Contributive margin is calculated as net revenue less variable costs. It may be expressed in dollars or as a percentage of net revenue. Management uses
this measure to determine the amount of profit to be expected for any change in revenues. While these measures are typical cost accounting measures, none of
these measures are recognized in accordance with GAAP. The classification of expenses as either variable or fixed is judgmental and other companies might
classify such expenses differently. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by other companies.
We closely monitor variable costs and seek to achieve the contributive margin in our business model. Over a period of many years, we have generally maintained a
contributive margin of between 45% and 47% of revenues. The erosion of average selling prices, particularly of our semiconductor products, that is typical of our
industry, and inflation negatively impact contributive margin and drive us to continually seek ways to reduce our variable costs. Our variable cost reduction efforts
include increasing the efficiency in our production facilities by expending capital for automation, reducing materials costs, materials substitution, increasing wafer size
and shrinking dies to maximize efficiency in our semiconductor production processes, and other yield improvement activities.
Our cost management strategy also includes a focus on controlling fixed costs recorded as costs of products sold or selling, general, and administrative expenses
and maintaining our break-even point (adjusted for acquisitions). We generally seek to limit increases in selling, general, and administrative expenses to the rate of
inflation, excluding foreign currency exchange effects and substantially independent of sales volume changes. At constant fixed costs, we would expect each $1
million increase in revenues to increase our operating income by approximately $450,000 to $470,000. Sudden changes in the business conditions, however, may
not allow us to quickly adapt our manufacturing capacity and cost structure.
During 2023, we implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") to enable us to recruit and retain highly qualified
employees, directors, consultants and other service providers, provide them with an incentive for productivity, and create an opportunity for them to share in the
growth and value of the Company. The 2023 Plan is the first broad-based stock compensation program at Vishay in over 20 years. This program increased
operating expenses by $8.8 million in 2023 and is expected to increase operating expenses by between $7 million and $10 million in 2024 versus 2023.
Management believes such additional non-cash costs will enhance the long-term performance of the Company by providing selected participants with an incentive
to improve the growth and profitability of the Company.
Also beginning in 2023, we made and are making significant investments in capital expenditures primarily for capital expansion projects outside of China, which will
increase depreciation expense. At the same time, we are focusing on increasing our technical resources, adding additional customer-facing engineers, and
intensifying our activities in R&D. We have seen and expect to continue to see an increase in operating expenses over the next couple of years as we add these
engineering talents, fill gaps in our technology, and become a preferred supplier to more customers and more broadly sell our product portfolio. Management
believes such additional costs will enhance our long-term performance by accelerating our growth.
Occasionally, our ongoing cost containment activities are not adequate and we must take actions to maintain our cost competitiveness. We incurred significant
restructuring expenses in our past to reduce our cost structure. Historically, our primary cost reduction technique was through the transfer of production to the
extent possible from high-labor-cost countries to lower-labor-cost countries. We believe that our manufacturing footprint is suitable to serve our customers and
end markets, while maintaining lower manufacturing costs. Since 2013, our cost reduction programs have primarily focused on reducing fixed costs, including
selling, general, and administrative expenses.
We continue to monitor the economic environment and its potential effects on our customers and the end markets that we serve.
We do not anticipate any material restructuring activities in 2024. However, a worsening business environment for the electronics industry or a significant economic
downturn may require us to implement additional restructuring initiatives.
In uncertain times, we focus on managing our production capacities in accordance with customer requirements, and maintain discipline in terms of our fixed costs
and capital expenditures. Even as we seek to manage our costs, we remain cognizant of the future requirements of our demanding markets. We continue to pursue
our growth plans through investing in capacities for strategic product lines, and through increasing our resources for R&D, technical marketing, and field application
engineering; supplemented by opportunistic acquisitions of specialty businesses.
Our long-term strategy includes growth through the integration of acquired businesses, and GAAP requires plant closure and employee termination costs that we
incur in connection with our acquisition activities to be recorded as expenses in our consolidated statement of operations, as such expenses are incurred. We have
not incurred any material plant closure or employee termination costs related to any of the businesses acquired since 2011, but we expect to have some level of
future restructuring expenses due to acquisitions.
40
Foreign Currency Translation
We are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functional currencies of certain subsidiaries.
We occasionally use forward exchange contracts to economically hedge a portion of our projected cash flows from these exposures.
GAAP requires that entities identify the “functional currency” of each of their subsidiaries and measure all elements of the financial statements in that functional
currency. A subsidiary’s functional currency is the currency of the primary economic environment in which it operates. In cases where a subsidiary is relatively self-
contained within a particular country, the local currency is generally deemed to be the functional currency. However, a foreign subsidiary that is a direct and integral
component or extension of the parent company’s operations generally would have the parent company’s currency as its functional currency. We have both
situations among our subsidiaries.
Foreign Subsidiaries which use the Local Currency as the Functional Currency
We finance our operations in Europe and certain locations in Asia in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional
currency. For those subsidiaries where the local currency is the functional currency, assets and liabilities in the consolidated balance sheets have been translated at
the rate of exchange as of the balance sheet date. Translation adjustments do not impact the results of operations and are reported as a separate component of
stockholders’ equity.
For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the average exchange rate for the year. While the
translation of revenues and expenses into U.S. dollars does not directly impact the consolidated statement of operations, the translation effectively increases or
decreases the U.S. dollar equivalent of revenues generated and expenses incurred in those foreign currencies. The dollar was weaker during 2023 versus 2022,
but stronger during 2022 versus 2021, with the translation of foreign currency revenues and expenses into U.S. dollars increasing reported revenues and expenses
in 2023 versus 2022, but decreasing reported revenues and expenses in 2022 versus 2021.
Foreign Subsidiaries which use the U.S. Dollar as the Functional Currency
Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their
functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured
into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the results
of operations. While these subsidiaries transact most business in U.S. dollars, they may have significant costs, particularly payroll-related, which are incurred in the
local currency. The cost of products sold and selling, general, and administrative expense have been favorably impacted for the year ended December 31, 2023
compared to 2022 and for the year ended December 31, 2022 compared to 2021 by local currency transactions of subsidiaries which use the U.S. dollar as their
functional currency.
See Item 7A for additional discussion of foreign currency exchange risk.
41
Critical Accounting Policies and Estimates
Our significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number of policies that entail significant
judgments or estimates.
Revenue Recognition
Revenue is measured based on the consideration specified in contracts with customers, and excludes any sales incentives and amounts collected on behalf of third
parties. We recognize revenue when we satisfy our performance obligations.
We have a broad line of products that we sell to OEMs, electronic manufacturing services ("EMS") companies, which manufacture for OEMs on an outsourcing
basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS companies.
We recognize revenue on sales to distributors when the distributor takes control of the products ("sold-to" model). We have agreements with distributors that
allow distributors a limited credit for unsaleable products, which we refer to as a "scrap allowance." Consistent with industry practice, we also have a "stock, ship
and debit" program whereby we consider requests by distributors for credits on previously purchased products that remain in distributors' inventory, to enable the
distributors to offer more competitive pricing. In addition, we have contractual arrangements whereby we provide distributors with protection against price
reductions initiated by us after product is sold by us to the distributor and prior to resale by the distributor.
We recognize the estimated variable consideration to be received as revenue and record a related accrued expense for the consideration not expected to be
received, based upon an estimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable to sales
recorded through the end of the period. We make these estimates based upon sales levels to our customers during the period, inventory levels at the distributors,
current and projected market conditions, and historical experience under the programs. We utilize a number of different methodologies and consider several factors
when estimating the accruals. Some of the factors that we consider are sales levels to customers during the relevant period, inventory levels at the distributors,
current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for
credits. These procedures require the exercise of significant judgments. We believe that we have a reasonable basis to estimate future credits under the programs.
See Notes 1 and 9 to our consolidated financial statements for further information.
Inventories
We value our inventories at the lower of cost or net realizable value, with cost determined under the first-in, first-out method. The valuation of our inventories
requires our management to make market estimates. For work in process goods, we are required to estimate the cost to completion of the products and the prices
at which we will be able to sell the products. For finished goods, we must assess the prices at which we believe the inventory can be sold. Inventories are also
adjusted for estimated obsolescence and written down to net realizable value based on age of the inventory and upon estimates of future demand, technology
developments, and market conditions.
Goodwill
See Note 1 to our consolidated financial statements for a description of our goodwill impairment tests.
The fair value of reporting units for goodwill impairment testing purposes is measured primarily using present value techniques based on projected cash flows from
the reporting unit. The calculated results are evaluated for reasonableness using comparable company data. The determination of the fair value of the reporting
units requires us to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: the selection of
appropriate peer group companies; control premiums appropriate for acquisitions in the industries in which we compete; the discount rate; terminal growth rates;
and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.
Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. In addition, changes in assumptions
concerning future financial results or other underlying assumptions could have a significant impact on the fair value of the reporting unit and the amount of the
goodwill impairment charge.
42
Pension and Other Postretirement Benefits
Our defined benefit plans are concentrated in the United States, Germany, and the Republic of China (Taiwan). At December 31, 2023, our U.S. plans include
various non-qualified plans. The table below summarizes information about our pension and other postretirement benefit plans. This information should be read in
conjunction with Note 11 to our consolidated financial statements (amounts in thousands):
U.S. non-qualified pension plans
German pension plans
Taiwanese pension plans
Other pension plans
OPEB plans
Other retirement obligations
Benefit
obligation
$
$
30,691
132,627
43,385
34,771
11,823
11,087
264,384
Plan assets
-
$
-
35,826
27,461
-
-
63,287
$
$
$
Funded
position
(30,691)
(132,627)
(7,559)
(7,310)
(11,823)
(11,087)
(201,097)
Informally
funded assets
21,540
$
4,115
-
-
-
-
25,655
$
Net position
$
(9,151) $
(128,512)
(7,559)
(7,310)
(11,823)
(11,087)
(175,442) $
$
Unrecognized
actuarial
items
(522)
17,261
5,198
2,432
(39)
-
24,330
Accounting for defined benefit pension and other postretirement plans involves numerous assumptions and estimates. The discount rate at which obligations could
effectively be settled and the expected long-term rate of return on plan assets are two critical assumptions in measuring the cost and benefit obligations of our
pension and other postretirement benefit plans. Other important assumptions include the anticipated rate of future increases in compensation levels, estimated
mortality, and for certain postretirement medical plans, increases or trends in health care costs. Management reviews these assumptions at least annually. We use
independent actuaries and investment advisers to assist us in formulating assumptions and making estimates. These assumptions are updated periodically to reflect
the actual experience and expectations on a plan specific basis as appropriate.
In the U.S., we utilize published long-term high quality bonds to determine the discount rate at the measurement date. In Germany and the Republic of China
(Taiwan), we utilize published long-term government bond rates to determine the discount rate at the measurement date. We utilize bond yields at various maturity
dates that reflect the timing of expected future benefit payments. We believe the discount rates selected are the rates at which these obligations could effectively be
settled.
Non-qualified plans in the U.S. are considered by law to be unfunded. However, the Company maintains assets in a rabbi trust to fund benefit payments under
certain of these plans. Such assets would be subject to creditor claims under certain conditions. (See also Notes 11 and 18 to our consolidated financial
statements.)
Many of our non-U.S. plans are unfunded based on local laws and customs. For those non-U.S. plans that do maintain investments, their asset holdings are
primarily cash and fixed income securities, based on local laws and customs. Some non-U.S. plans also informally fund their plans by holding certain available-for-
sale investments. Such assets would be subject to creditor claims under certain conditions. (See also Note 18 to our consolidated financial statements.)
We set the expected long-term rate of return based on the expected long-term average rates of return to be achieved by the underlying investment portfolios. In
establishing this rate, we consider historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and
investment advisors, and current economic and capital market conditions. The expected return on plan assets is incorporated into the computation of pension
expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset losses (gains) affects the
calculated value of plan assets and, ultimately, future pension expense (income).
We continue to seek to de-risk our global pension exposures. Such actions could result in increased net periodic pension cost due to lower expected rates of
return on plan assets and/or possible additional charges to recognize unamortized actuarial items if all or a portion of the obligations were to be settled.
We believe that the current assumptions used to estimate plan obligations and annual expenses are appropriate. However, if economic conditions change or if our
investment strategy changes, we may be inclined to change some of our assumptions, and the resulting change could have a material impact on the consolidated
statements of operations and on the consolidated balance sheet.
43
Income Taxes
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our
provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is
uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves
are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these
reserves in light of changing facts and circumstances and the provision for income taxes includes the impact of reserve provisions and changes to reserves that are
considered appropriate.
These accruals for tax-related uncertainties are based on our best estimate of potential tax exposures. When particular matters arise, a number of years may elapse
before such matters are audited by tax authorities and finally resolved. Favorable resolution of such matters could be recognized as a reduction to our effective tax
rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of
resolution.
During 2023, certain tax examinations were concluded and certain statutes of limitations lapsed. Our tax provision for those years includes adjustments related to
the resolution of these matters. We settled an examination of our U.S. federal income tax returns for the periods ended December 31, 2017 through 2019. Our
federal income tax returns for subsequent years remain subject to examination. The tax returns of significant non-U.S. subsidiaries currently under examination are
located in the following jurisdictions: Israel (2021), Germany (2017 through 2021), India (2004 through 2021), and Philippines (2017 through 2022). The
Company and its subsidiaries also file income tax returns in other taxing jurisdictions in the U.S. and around the world, many of which are still open to examination.
See Notes 1 and 5 to consolidated financial statements for additional information.
44
Results of Operations
Statement of operations’ captions as a percentage of net revenues and the effective tax rates were as follows:
Costs of products sold
Gross profit
Selling, general, and administrative expenses
Operating income
Income before taxes and noncontrolling interest
Net earnings attributable to Vishay stockholders
________
Effective tax rate
Net Revenues
Net revenues were as follows (dollars in thousands):
Net revenues
Change versus prior year
Percentage change versus prior year
Changes in net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Acquisitions
Other
Net change
Years ended December 31,
2022
2021
2023
71.4%
28.6%
14.4%
14.3%
13.7%
9.5%
69.7%
30.3%
12.7%
17.6%
17.0%
12.3%
30.4%
27.5%
72.6%
27.4%
13.0%
14.4%
13.4%
9.2%
31.2%
2023
2022
2021
$
$
3,402,045
(95,356)
$
$
(2.7)%
3,497,401
256,914
$
3,240,487
7.9%
2023 vs. 2022
2022 vs. 2021
(5.2)%
1.7%
0.7%
0.2%
(0.1)%
(2.7)%
4.3%
7.2%
(4.0)%
0.4%
0.0%
7.9%
Despite the inventory correction that we are experiencing, the long-term prospects for our business remain favorable, and we continue to increase manufacturing
capacities for critical product lines. The decrease in net revenues in 2023 is primarily sales volume-driven, partially offset by increased average selling prices. The
increase in net revenues in 2022 was primarily due to increased sales volume and average selling prices.
Gross Profit and Margins
Gross profit margins for the year ended December 31, 2023 were 28.6%, as compared to 30.3% for the year ended December 31, 2022. The decrease in gross
profit margin is primarily due to decreased sales volume. Higher labor, materials, and utilities costs also negatively impacted the gross profit margin.
45
Segments
Analysis of revenues and margins for our segments is provided below. Direct costs of the COVID-19 pandemic are not allocated to the segments.
MOSFETs
Net revenues of the MOSFETs segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in MOSFETs segment net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Acquisition
Other
Net change
Gross profit margins and segment operating margins for the MOSFETs segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2023
2021
$
$
778,754
16,494
$
$
2.2%
762,260
94,262
$
667,998
14.1%
2023 vs. 2022
2022 vs. 2021
(1.8)%
2.3%
0.5%
1.0%
0.2%
2.2%
4.1%
11.8%
(2.4)%
0.1%
0.5%
14.1%
Years ended December 31,
2022
2021
2023
33.3%
25.1%
36.0%
30.0%
28.4%
22.3%
Net revenues of the MOSFETs segment increased slightly in 2023 versus the prior year. The increase is primarily due to increased sales to automotive, power
supply, and industrial end market customers in the Europe region, partially offset decreased sales to customers in the Americas and Asia regions.
The gross profit margin in 2023 decreased versus the prior year primarily due to higher utilities, labor, and repair and maintenance costs.
The segment operating margin decreased versus the prior year primarily due to decreased gross profit. Increased segment SG&A expenses primarily due to
acquisition-related expenses also contributed to the decrease.
Average selling prices increased versus the prior year.
We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines. We have begun building a 12-inch wafer fab in Itzehoe,
Germany adjacent to our existing 8-inch wafer fab, which we expect will increase our in-house wafer capacity by approximately 70% within 2-3 years and allow us
to balance our in-house and foundry wafer supply.
We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022. Our pending
acquisition of Nexperia's Newport fab is expected to enhance the manufacturing capacity and capabilities of our MOSFETs segment.
46
Diodes
Net revenues of the Diodes segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in Diodes segment net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Other
Net change
Gross profit margins and segment operating margins for the Diodes segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2023
2021
$
$
690,540
(74,680)
$
$
(9.8)%
765,220
55,804
$
709,416
7.9%
2023 vs. 2022
2022 vs. 2021
(11.0)%
1.0%
0.4%
(0.2)%
(9.8)%
1.8%
9.7%
(3.7)%
0.1%
7.9%
Years ended December 31,
2022
2021
2023
25.4%
22.2%
25.9%
23.1%
23.7%
20.6%
Net revenues of the Diodes segment decreased significantly in 2023. The decrease is primarily due to decreased sales to distribution and EMS customers, power
supply end market customers, and customers in the Americas and Asia regions, partially offset by increased sales to automotive end market customers.
Gross profit margin decreased versus the prior year primarily due to lower sales volume and higher materials, labor, and fixed costs, partially offset by higher
average selling prices.
Segment operating margin decreased versus the prior year primarily due to decreased gross profit.
Average selling prices increased versus the prior year.
47
Optoelectronic Components
Net revenues of the Optoelectronic Components segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in Optoelectronic Components segment net revenues were attributable to the following:
Change attributable to:
Decrease in volume
Increase in average selling prices
Foreign currency effects
Other
Net change
Years ended December 31,
2022
2023
2021
$
$
243,146
(53,238)
$
$
(18.0)%
296,384
(6,330)
$
302,714
(2.1)%
2023 vs. 2022
2022 vs. 2021
(19.2)%
0.5%
0.9%
(0.2)%
(18.0)%
(3.6)%
6.7%
(4.7)%
(0.5)%
(2.1)%
Gross profit margins and segment operating margins for the Optoelectronic Components segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2021
2023
25.6%
17.7%
34.7%
28.8%
33.3%
27.2%
Net revenues of the Optoelectronic Components segment decreased significantly versus the prior year. The decrease was primarily due to general consumer
weakness that impacted many of the products we sell. The result was decreased sales to distribution customers and customers in all regions. We expect long-term
growth for this segment.
The gross profit margin decreased versus the prior year. The decrease is primarily due to lower sales volume, higher materials, services, labor, and utilities costs,
and inventory and higher depreciation expense.
The segment operating margin decreased primarily due to the decrease in gross profit.
Average selling prices increased versus the prior year.
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany.
48
Resistors
Net revenues of the Resistors segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in Resistors segment net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Acquisitions
Other
Net change
Gross profit margins and segment operating margins for the Resistors segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2023
2021
$
$
843,472
10,666
$
$
1.3%
832,806
80,252
$
752,554
10.7%
2023 vs. 2022
2022 vs. 2021
(1.4)%
1.8%
1.0%
0.0%
(0.1)%
1.3%
10.4%
4.6%
(5.6)%
1.5%
(0.2)%
10.7%
Years ended December 31,
2022
2021
2023
28.3%
24.8%
31.5%
28.2%
28.7%
25.4%
Net revenues of the Resistors segment increased slightly versus the prior year. The increase was primarily due to increased sales to military and aerospace,
automotive, and industrial end market customers and customers in the Europe region, partially offset by decreased sales to distribution customers.
The gross profit margin decreased versus the prior year. The decrease is due to lower sales volume, higher labor and materials costs, and other inflationary
impacts, partially offset by increased average selling prices, lower metals and logistics costs, and favorable exchange rate impacts.
Segment operating margin decreased versus the prior year. The decrease is primarily due to decreased gross profit.
Average selling prices increased versus the prior year.
We are increasing critical manufacturing capacities for certain product lines. We continue to broaden our business with targeted acquisitions of specialty resistors
businesses.
49
Inductors
Net revenues of the Inductors segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in Inductors segment net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Other
Net change
Gross profit margins and segment operating margins for the Inductors segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2023
2021
$
$
347,392
16,306
$
$
4.9%
331,086
(4,552)
$
335,638
(1.4)%
2023 vs. 2022
2022 vs. 2021
2.4%
1.9%
0.5%
0.1%
4.9%
(0.8)%
1.2%
(1.8)%
0.0%
(1.4)%
Years ended December 31,
2022
2021
2023
32.4%
28.7%
31.5%
28.2%
32.0%
29.0%
Net revenues of the Inductors segment increased moderately versus the prior year. The increase is primarily due to increased sales to EMS customers, medical,
automotive, and military and aerospace end market customers, and customers in the Americas and Europe regions, partially offset by decreased sales to
distribution customers, industrial and telecommunications end market customers, and customers in the Asia region.
The gross profit margin increased versus the prior year. The increase is primarily due to increased average selling prices, higher sales volume, lower logistics and
metals prices, and positive foreign currency impacts, partially offset by higher labor and materials costs, other inflationary impacts, and start-up costs of a new
manufacturing facility.
Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit.
Average selling prices increased versus the prior year.
We expect long-term growth in this segment, and are continuously expanding manufacturing capacity for certain product lines and evaluating acquisition
opportunities, particularly of specialty businesses. We have greatly increased our manufacturing capacity for power inductors in the past year.
50
Capacitors
Net revenues of the Capacitors segment were as follows (dollars in thousands):
Net revenues
Change versus comparable prior year period
Percentage change versus comparable prior year period
Changes in Capacitors segment net revenues were attributable to the following:
Change attributable to:
Change in volume
Increase in average selling prices
Foreign currency effects
Other
Net change
Gross profit margins and segment operating margins for the Capacitors segment were as follows:
Gross profit margin
Segment operating margin
Years ended December 31,
2022
2023
2021
$
$
498,741
(10,904)
$
$
(2.1)%
509,645
37,478
$
472,167
7.9%
2023 vs. 2022
2022 vs. 2021
(5.1)%
2.2%
0.9%
(0.1)%
(2.1)%
8.0%
5.6%
(5.5)%
(0.2)%
7.9%
Years ended December 31,
2022
2021
2023
25.3%
21.1%
24.3%
20.6%
22.4%
18.1%
Net revenues of the Capacitors segment decreased slightly versus the prior year. The decrease is primarily due to decreased sales to distribution and EMS
customers and customers in the Americas and Asia regions, partially offset by increased sales to industrial end market customers.
The gross profit margin increased versus the prior year. The increase is due to increased average selling prices, positive impact of product mix, positive foreign
currency impacts, and lower metals, freight, and utility costs, partially offset by lower sales volume and higher labor and tantalum costs.
Segment operating margin increased versus the prior year. The increase is primarily due to increased gross profit.
Average selling prices have increased versus the prior year.
51
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses are summarized as follows (dollars in thousands):
Total SG&A expenses
as a percentage of sales
Years ended December 31,
2022
2021
2023
$
488,349
$
443,503
$
420,111
14.4%
12.7%
13.0%
SG&A expenses for the year ended December 31, 2023 increased versus the year ended December 31, 2022 due to general inflation and higher compensation
costs, including the implementation of the 2023 Long-Term Incentive Plan in 2023.
Other Income (Expense)
2023 Compared to 2022
Interest expense for the year ended December 31, 2023 increased by $8.0 million versus the year ended December 31, 2022. The increase is primarily due to
higher interest rates and higher average balances outstanding on the revolving credit facility in 2023 prior to September 2023 when it was paid down to $0.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands):
Years ended December 31,
2023
2022
Change
Foreign exchange gain (loss)
Interest income
Other components of net periodic pension expense
Investment income (loss)
Other
2022 Compared to 2021
$
$
$
677
31,353
(8,730)
1,347
616
25,263
$
$
5,690
7,560
(11,090)
(6,812)
(200)
(4,852) $
(5,013)
23,793
2,360
8,159
816
30,115
Interest expense for the year ended December 31, 2022 decreased by $0.4 million versus the year ended December 31, 2021.
The following table analyzes the components of the line “Other” on the consolidated statements of operations (in thousands):
Foreign exchange gain (loss)
Interest income
Other components of net periodic pension expense
Investment income (loss)
Other
Years ended December 31,
2022
2021
Change
$
$
$
5,690
7,560
(11,090)
(6,812)
(200)
(4,852) $
(2,692) $
1,269
(13,206)
(1,036)
11
(15,654) $
8,382
6,291
2,116
(5,776)
(211)
10,802
52
Income Taxes
For the years ended December 31, 2023, 2022, and 2021, the effective tax rates were 30.4%, 27.5%, and 31.2%, respectively. With the reduction in the U.S.
statutory rate to 21% beginning January 1, 2018, we expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions.
Historically, the effective tax rates were generally less than the U.S. statutory rate of 35% primarily because of earnings in foreign jurisdictions. Discrete tax items
impacted our effective tax rate for each period presented. These items were $20.0 million in 2022 and $39.3 million in 2021.
There were no unusual tax transactions that impacted the effective tax rate for the year ended December 31, 2023.
The effective tax rate for the year ended December 31, 2022 was impacted by $5.9 million of tax benefits recognized for changes in uncertain tax positions
following the resolution of a tax audit, $59.6 million of tax expense recognized upon the change in indefinite reversal assertion on earnings in Germany, and $33.7
million of tax benefits recognized upon the release of a valuation allowance.
We made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely reinvested. We
recorded additional tax expense during the fourth fiscal quarter of 2022 to accrue the $59.6 million of withholding taxes necessary to distribute these approximately
$360.0 million of accumulated earnings to the United States.
The effective tax rate for the year ended December 31, 2021 was impacted by $53.3 million of tax expense recognized upon a change in Israeli tax law that was
enacted on November 15, 2021. We have historically benefited from tax incentive programs offered by the Israeli government, including the generation of income
not subject to current income tax. Any tax-exempt earnings generated under these programs would incur an additional “claw-back” tax at approximately 11.1% if
they were distributed or invested outside of Israel, in addition to normal withholding taxes on earnings distributed from Israel. Otherwise, taxes on such earnings
were indefinitely deferred.
The change in Israeli tax law provided companies with an election to currently pay a reduced claw-back rate of as low as 6% upon meeting certain conditions, with
the ability to distribute or invest those amounts outside of Israel at any time in the future. We elected to pay taxes on all previously untaxed earnings at the reduced
6% claw-back rate. As a direct result of this change in tax law, we made the determination during the fourth fiscal quarter of 2021 that substantially all unremitted
foreign earnings in Israel are no longer permanently reinvested. We recorded the additional tax expense during the fourth fiscal quarter of 2021 to accrue the claw-
back tax on applicable earnings and withholding taxes necessary to distribute these approximately $385.0 million of accumulated earnings to the United States. We
repatriated $81.2 million (net of taxes) to the United States in 2022 pursuant to this repatriation program. We paid withholding taxes, foreign taxes, and Israeli
clawback taxes of $25.2 million due to the repatriation.
The effective tax rate for the year ended December 31, 2021 was also impacted by a $5.7 million tax benefit recognized upon the release of a valuation allowance
and $8.3 million of tax benefits recognized due to changes in tax regulations.
We operate in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a
composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of our historical strategy has been to achieve cost
savings through the transfer and expansion of manufacturing operations to countries where we can take advantage of lower labor costs and available tax and other
government-sponsored incentives.
Additional information about income taxes is included in Note 5 to our consolidated financial statements.
53
Financial Condition, Liquidity, and Capital Resources
Our financial condition as of December 31, 2023 continued to be strong. Cash and short-term investments exceed our long-term debt balances, and we have
historically been a strong generator of operating cash flows. The cash generated from operations is used to fund our capital expenditure plans, and cash in excess
of our capital expenditure needs is available to fund our acquisition strategy, to reduce debt levels, and to pay dividends and repurchase stock.
Management uses a non-GAAP measure, "free cash," to evaluate our ability to fund acquisitions, repay debt, and otherwise enhance stockholder value through
stock repurchases or dividends. See "Overview" above for "free cash" definition and reconciliation to GAAP.
Cash flows provided by operating activities were $365.7 million for the year ended December 31, 2023, as compared to cash flows provided by operations of
$484.3 million for the year ended December 31, 2022.
In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle. The following table presents the components of our cash
conversion cycle during the five fiscal quarters beginning with the fourth fiscal quarter of 2022 through the fourth fiscal quarter of 2023:
Days sales outstanding ("DSO") (a)
Days inventory outstanding ("DIO") (b)
Days payable outstanding ("DPO") (c)
Cash conversion cycle
4th Quarter
2022
1st Quarter
2023
2nd Quarter
2023
3rd Quarter
2023
4th Quarter
2023
45
93
(31)
107
45
98
(32)
111
46
94
(32)
108
48
96
(33)
111
50
101
(31)
120
a) DSO measures the average collection period of our receivables. DSO is calculated by dividing the average accounts receivable by the average net revenue per day for the respective
fiscal quarter.
b) DIO measures the average number of days from procurement to sale of our product. DIO is calculated by dividing the average inventory by average cost of goods sold per day for
the respective fiscal quarter.
c) DPO measures the average number of days our payables remain outstanding before payment. DPO is calculated by dividing the average accounts payable by the average cost of
goods sold per day for the respective fiscal quarter.
Cash paid for property and equipment for the year ended December 31, 2023 was $329.4 million, as compared to $325.3 million for the year ended December
31, 2022. To be well positioned to service our customers and to fully participate in growing markets, we have increased and expect to maintain a relatively high
level of capital expenditures for expansion in the mid-term. We expect to invest approximately $450 million in 2024 and approximately $1.2 billion from 2023 to
2025 primarily for capital expansion projects outside of China.
Free cash flow for the year ended December 31, 2023 decreased versus the year ended December 31, 2022 primarily due to decreased net earnings, increased
transition and repatriation taxes paid, and a working capital increase. We expect that free cash flow will be negatively impacted by the expected high level of
capital expenditures for expansion in 2023 - 2025 after which we expect to generate increasingly higher levels of free cash. There is no assurance, however, that
we will be able to continue to generate cash flows from operations and free cash at our historical levels, or at all, going forward if the economic environment
worsens.
In 2022, our Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.
See “Stockholder Return Policy” above for additional information.
The following table summarizes the components of net cash and short-term investments (debt) (in thousands):
Credit facility
Convertible senior notes, due 2025
Convertible senior notes, due 2030
Deferred financing costs
Total debt
Cash and cash equivalents
Short-term investments
Net cash and short-term investments (debt)
December 31,
2023
December 31,
2022
$
$
-
95,102
750,000
(26,914)
818,188
972,719
35,808
42,000
465,344
-
(6,407)
500,937
610,825
305,272
$
190,339
$
415,160
"Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP. This measure should not be
viewed as an alternative to GAAP measures of performance or liquidity. However, management believes that an analysis of "net cash and short-term investments
(debt)" assists investors in understanding aspects of our cash and debt management. The measure, as calculated by us, may not be comparable to similarly titled
measures used by other companies.
We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1 year, which we classify as short-
term investments on our consolidated balance sheets. As these investments were funded using a portion of excess cash and represent a significant aspect of our
cash management strategy, we include the investments in the calculation of net cash and short-term investments (debt).
54
The interest rates on our short-term investments vary by location. Transactions related to these investments are classified as investing activities on our consolidated
statements of cash flows. We aligned the maturity dates of our cash equivalents and short-term investments in preparation of the planned cash repatriation that was
completed in the fourth fiscal quarter of 2023, which resulted in a decrease in our short-term investment balance.
As of December 31, 2023, 65.5% of our cash and cash equivalents and short-term investments were held in countries outside of the United States. Cash
dividends to stockholders, share repurchases, and principal and interest payments on our debt instruments need to be paid by the U.S. parent company, Vishay
Intertechnology, Inc. A U.S.-domiciled subsidiary is expected to be the acquiring entity of Nexperia's wafer fabrication facility and operations in Newport, South
Wales, U.K. Our U.S. subsidiaries also have cash operating needs. The recent distribution of earnings from Israel and Germany to the United States will be used
to fund our Stockholder Return Policy and the Nexperia transaction. We expect that cash on-hand and cash flows from operations will be sufficient to meet our
longer-term financing needs related to normal operating requirements, regular dividend payments, share repurchases pursuant to our Stockholder Return Policy,
and our research and development and capital expenditure plans. Our substantially undrawn credit facility provides us with significant operating liquidity in the
United States.
On May 8, 2023, we amended and restated our $750 million revolving credit agreement, which replaced our credit agreement that was scheduled to mature in
June 2024. The amendment and restatement extended the maturity date of the revolving credit agreement until May 8, 2028.
The maximum amount available on the revolving credit facility is restricted by the financial covenants described below. The credit facility also provides us the ability
to request up to $300 million of incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving
commitments, incremental “term loan A” or “term loan B” facilities, or incremental equivalent debt.
We had $42 million outstanding on our revolving credit facility at December 31, 2022 and no amounts outstanding at December 31, 2023. We borrowed $501
million and repaid $543 million on the revolving credit facility during the year ended December 31, 2023. The average outstanding balance on our revolving credit
facility calculated at fiscal month-ends was $93.3 million and the highest amount outstanding on our revolving credit facility at a fiscal month end was $185 million
during the year ended December 31, 2023. We used $185 million of the net proceeds from the convertible senior notes due 2030 to repay amounts outstanding
on the revolving credit facility in the third fiscal quarter of 2023.
The amendment and restatement of the facility replaced the leverage ratio used for compliance measurement with a net leverage ratio, reducing the measure of
outstanding debt by up to $250 million of unrestricted cash. Measurements prior to the amendment and restatement were based on a total leverage ratio.
Pursuant to the credit facility, the financial maintenance covenants include (a) an interest coverage ratio of not less than 2.00 to 1; and (b) a net leverage ratio of not
more than 3.25 to 1 (and a pro forma ratio of 3.00 to 1 on the date of incurrence of additional debt). The computation of these ratios is prescribed in Article VI of
the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which was filed with the SEC as Exhibit 10.1 to our current report
on Form 8-K filed May 8, 2023.
The revolving credit facility limits or restricts us from, among other things, incurring indebtedness, incurring liens on its respective assets, making investments and
acquisitions (assuming our pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash dividends and making other restricted
payments (assuming our pro forma net leverage ratio is greater than 2.50 to 1.00).
We were in compliance with all financial covenants under the credit facility at December 31, 2023. Our interest coverage ratio and net leverage ratio were 17.83
to 1 and 0.84 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections.
If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and any amounts then outstanding
pursuant to the credit facility could become immediately payable. Additionally, our convertible senior notes due 2025 and due 2030 have cross-default provisions
that could accelerate repayment in the event the indebtedness under the credit facility is accelerated. The maturity date of the amended and restated credit facility
will accelerate if within ninety-one days prior to the maturity of our convertible senior notes due 2025, the outstanding principal amount of such notes exceeds a
defined liquidity measure as set forth in the credit facility. The repurchase of $370.2 million principal amount of convertible senior notes due 2025 in the third fiscal
quarter of 2023 reduces the risk that the maturity date of the credit facility will accelerate.
Borrowings under the credit facility bear interest at variable reference rates plus an interest margin. The applicable interest margin is based on our total leverage
ratio. We also pay a commitment fee, also based on our total leverage ratio, on undrawn amounts. U.S. dollar borrowings under the revolving credit agreement
are based on SOFR (including a customary spread adjustment). Borrowings in foreign currencies bear interest at currency-specific reference rates plus an interest
margin. Based on our current total leverage ratio of 1.19 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 1.60% (including the applicable
credit spread), and the undrawn commitment fee is 0.25% per annum.
The borrowings under the credit facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and
general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than
the United States, assets located solely outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the
United States, and pledges of stock in certain subsidiaries; and are guaranteed by certain significant subsidiaries.
We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our revolving credit facility. We
also expect to continue to use the credit facility from time-to-time to meet certain short-term financing needs. Additional acquisition activity, convertible debt
repurchases, or conversion of our convertible debt instruments may require additional borrowing under our credit facility or may otherwise require us to incur
additional debt. No principal payments on our debt are due before 2025.
55
On September 12, 2023, we issued $750 million convertible senior notes due 2030. We used the net proceeds from the issuance of these notes to repurchase
$370.2 million principal amount of convertible senior notes due 2025, to pay $94.2 million to enter into capped call transactions intended to mitigate the dilution
risk of convertible senior notes due 2030 by synthetically increasing the conversion price of the notes to approximately $43.98 per share, to repay amounts
outstanding on our amended and restated credit facility, and for other general corporate purposes.
Prior to six months before the maturity date, our convertible senior notes due 2030 are convertible by the holders under certain circumstances. The convertible
senior notes due 2030 are not convertible as of September 30, 2023 and will not be contingently convertible before the first fiscal quarter of 2024. Pursuant to the
indenture governing the convertible senior notes due 2030, we will cash-settle the principal amount of $1,000 per note and settle any additional amounts in cash or
shares of our common stock. We intend to finance the principal amount of any converted senior notes due 2030 using borrowings under our credit facility.
The transactions effectively refinanced the majority of the convertible senior notes due 2025 for five additional years at the same coupon interest rate, reduced
future interest expense due to the paydown of the revolving credit facility, and enhanced our U.S. liquidity position to execute our growth initiatives.
The remaining convertible senior notes due 2025 are not currently convertible. Pursuant to the indenture governing the convertible senior notes due 2025 and the
amendments thereto incorporated in the Supplemental Indenture dated December 23, 2020, we will cash-settle the principal amount of $1,000 per note and settle
any additional amounts in shares of our common stock. We intend to finance the principal amount of any converted notes using borrowings under our credit
facility. No conversions have occurred to date.
56
In evaluating our liquidity and capital resources, we consider our outstanding commitments. As of December 31, 2023 our commitments were as follows (in
thousands):
Total
2024
2025
Payments due by period
2027
2026
2028
Thereafter
Long-term debt
Interest payments on long-term debt
Operating leases
Letters of credit
Expected pension and postretirement plan
$
funding
Estimated costs to complete construction
in progress
Estimated costs to complete MOSFETs
wafer fab
Remaining cost to acquire Newport wafer
fab
TCJA transition tax
Uncertain tax positions
Purchase commitments
Other long-term liabilities
Total contractual cash obligations
$
845,102
125,259
173,166
1,422
194,504
156,900
345,600
168,250
84,649
13,847
87,583
74,071
2,270,353
$
$
-
21,064
27,474
-
19,144
135,600
119,900
168,250
37,622
-
57,824
-
586,878
$
$
95,102
19,905
24,235
-
19,871
19,900
177,700
-
47,027
-
29,109
-
432,849
$
$
-
18,924
19,692
-
20,388
1,400
48,000
-
-
-
650
-
109,054
$
$
-
18,924
17,802
-
25,113
-
-
-
-
-
-
-
61,839
$
$
-
17,614
15,154
1,422
19,143
-
-
-
-
-
-
-
53,333
$
$
750,000
28,828
68,809
-
90,845
-
-
-
-
13,847
-
74,071
1,026,400
Commitments for long-term debt are based on the amount required to settle the obligation. Accordingly, the capitalized deferred financing costs associated with our
convertible notes are excluded from the calculation of long-term debt commitments in the table above.
Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement and include fees under our
revolving credit facility, which expires on May 8, 2028. Commitments for interest payments on long-term debt exclude non-cash interest expense related to the
amortization of deferred financing costs.
Various factors could have a material effect on the amount of future principal and interest payments. Principal and interest commitments associated with our
convertible notes are based on the amounts outstanding as of December 31, 2023. Additionally, interest commitments for our revolving credit facility are based on
the rate prevailing at December 31, 2023, but actual rates are variable and are certain to change over time.
The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight years through 2025.
Estimated costs to complete the MOSFETs wafer fab include amounts that we are not contractually required to complete.
On November 8, 2023, Vishay and Nexperia BV announced that we have entered into an agreement whereby we will acquire Nexperia’s wafer fabrication facility
and operations located in Newport, South Wales, U.K. for approximately $177.0 million in cash. On November 8, 2023, we remitted $8.75 million to an escrow
account as a deposit for this agreement. The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to
occur in the first quarter of 2024.
Our consolidated balance sheet at December 31, 2023 includes liabilities associated with uncertain tax positions in multiple taxing jurisdictions where we conduct
business. Due to the uncertain and complex application of tax regulations, combined with the difficulty in predicting when tax audits throughout the world may be
concluded, we cannot make reliable estimates of the timing of the remaining cash outflows relating to these liabilities. Accordingly, we have classified all non-current
uncertain tax positions as payments due thereafter, although actual timing of payments may be sooner.
Expected pension and postretirement plan funding is based on a projected schedule of benefit payments under the plans.
We maintain long-term arrangements with subcontractors, suppliers, and other business partners to ensure access to external capacity and supplies for certain
products. The purchase commitments in the table above represent the estimated minimum commitments under these arrangements. Our actual purchases in future
periods are expected to be greater than these minimum commitments.
Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December 31, 2023. We include the
current portion of the long-term liabilities in the table above. Other long-term liabilities for which we are unable to reasonably estimate the timing of the settlement
are classified as payments due thereafter in the table above, although actual timing of payments may be sooner.
For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchase commitments, see Notes 2,
4, 5, 6, 11, and 13 to our consolidated financial statements.
57
Item 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk Disclosure
We are exposed to certain financial risks, including fluctuations in foreign currency exchange rates, interest rates, and commodity prices. We manage our exposure
to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. Our
policies do not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. We
do not use financial instruments for trading purposes and we are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on an
ongoing basis and believe that we can modify or adapt our hedging strategies as needed.
Interest Rate Risk
We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. On a selective basis, we have in the past entered into
interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on our outstanding variable rate debt. As of
December 31, 2023, 2022, and 2021 we did not have any outstanding interest rate swap or cap agreements.
The interest paid on our credit facilities is based on variable reference rates and an interest margin. At December 31, 2023, we had no amounts outstanding under
our revolving credit facilities. Future U.S. dollar borrowings under the revolving credit commitment will bear interest at SOFR plus 1.60%.
Our convertible debt instruments bear interest at a fixed rate, and accordingly are not subject to interest rate fluctuation risks.
At December 31, 2023, we had $972.7 million of cash and cash equivalents and $35.8 million of short-term investments, which earn interest at various variable
rates.
Based on the debt and cash positions at December 31, 2023, we would expect a 50 basis point increase or decrease in interest rates to increase or decrease our
annualized net earnings by approximately $3.6 million.
See Note 6 to our consolidated financial statements for additional information about our long-term debt.
Foreign Exchange Risk
We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than the functional currencies of
certain subsidiaries. We have used forward exchange contracts to economically hedge a portion of these exposures in the past. We had no outstanding forward
contracts as of December 31, 2023. We do not utilize derivatives or other financial instruments for trading or other speculative purposes.
Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locations in Asia in local currencies.
Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but these subsidiaries also have significant transactions in local
currencies. Our exposure to foreign currency risk is mitigated to the extent that the costs incurred and the revenues earned in a particular currency offset one
another. Our exposure to foreign currency risk is more pronounced in Israel, the Czech Republic, and China because the percentage of expenses denominated in
Israeli shekels, Czech koruna, and Chinese renminbi to total expenses is much greater than the percentage of sales denominated in Israeli shekels, Czech koruna,
and Chinese renminbi to total sales. Therefore, if the Israeli shekel, Czech koruna, and Chinese renminbi strengthen against all or most of our other major
currencies, our operating profit is reduced. Where possible, we maintain local currency denominated cash balances in these countries approximately equal to the
local currency liabilities to naturally hedge our exposures. We also have a slightly higher percentage of euro-denominated sales than expenses. Therefore, when the
euro strengthens against all or most of our other major currencies, our operating profit is slightly increased. Accordingly, we monitor several important cross-rates.
Upon completion of the acquisition of Nexperia's Newport wafer fab, we anticipate greater exposure to British sterling, where costs incurred in British sterling are
expected to exceed sales denominated in British sterling. The acquisition price for Nexperia's Newport wafer fab is denominated in U.S. dollars.
58
We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2023, using a model that measures the change in the values
arising from a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The foreign
currency exchange rates we used were based on market rates in effect at December 31, 2023. The sensitivity analyses indicated that a hypothetical 10% adverse
movement in foreign currency exchange rates would impact our net earnings by approximately $15.3 million at December 31, 2023, although individual line items in
our consolidated statement of operations would be materially affected. For example, a 10% weakening in all foreign currencies would decrease the U.S. dollar
equivalent of operating income generated in foreign currencies, which would be offset by foreign exchange gains of our foreign subsidiaries that have significant
transactions in U.S. dollars or have the U.S. dollar as their functional currency.
A change in the mix of the currencies in which we transact our business could have a material effect on the estimated impact of the hypothetical 10% movement in
the value of the U.S. dollar. Furthermore, the timing of cash receipts and disbursements could result in materially different actual results versus the hypothetical 10%
movement in the value of the U.S. dollar, particularly if there are significant changes in exchange rates in a short period of time.
Commodity Price Risk
Although most materials incorporated in our products are available from a number of sources, certain materials are available only from a relatively limited number of
suppliers or are subject to significant price volatility. Our results of operations may be materially and adversely affected if we have difficulty obtaining these raw
materials, the quality of available raw materials deteriorates, or there are significant price changes for these raw materials. The determination that any of the raw
materials used in our products are conflict minerals originating from the Democratic Republic of the Congo and adjoining countries could increase the probability
that we will encounter the challenges noted above, incur additional expenses to comply with government regulations, and face public scrutiny. For periods in which
the prices of these raw materials are rising, we may be unable to pass on the increased cost to our customers which would result in decreased margins for the
products in which they are used. For periods in which the prices are declining, we may be required to write down our inventory carrying cost of these raw
materials, since we record our inventory at the lower of cost or market. Depending on the extent of the difference between market price and our carrying cost, this
write-down could have a material adverse effect on our net earnings. We also may need to record losses for adverse purchase commitments for these materials in
periods of declining prices.
Silicon wafers are the most important raw material for the manufacturing of our semiconductor products. Silicon wafers are manufactured from high-purity silicon, a
metalloid. There have at times been industry-wide shortages of high-purity silicon resulting primarily from growing demand of the electronic component and solar
power industries, and limited growth in high-purity silicon manufacturing capacities. Shifts in demand for high-purity silicon and in turn, silicon wafers, have resulted
in significant fluctuation in prices of silicon wafers.
We are a major consumer of the world’s annual production of tantalum, a metal used in the manufacturing of tantalum capacitors. There are few suppliers that
process tantalum ore into capacitor grade tantalum powder.
Palladium, a metal used to produce multi-layer ceramic capacitors, is currently found primarily in South Africa and Russia. Palladium is a commodity metal that is
subject to price volatility. Certain other metals used in the manufacture of our products, such as copper, are traded on active markets, and can also be subject to
significant price volatility. We periodically enter into short-term commitments to purchase palladium and defined portions of annual consumption of other metals if
market prices decline below budget. In certain circumstances, we also purchase precious metals bullion in excess of our immediate manufacturing needs to mitigate
the risk of supply shortages or volatile price fluctuations.
We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increase our net earnings by $8.5
million, assuming that such changes in our costs have no impact on the selling prices of our products and that we have no pending commitments to purchase metals
at fixed prices.
59
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item are filed herewith, commencing on page F-1 of this report.
Item 9.
None.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Item 9A.
CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief
Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e)
and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our CEO and CFO concluded that our
disclosure controls and procedures were effective as of the end of the period covered by this annual report to ensure that information required to be disclosed in
reports that we file or submit under the Exchange Act is: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules
and forms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required
disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Certifications
The certifications of our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2 to this Annual Report on
Form 10-K. We have also filed with the New York Stock Exchange the most recent Annual Certification as required by Section 303A.12(a) of the New York
Stock Exchange Listed Company Manual.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December 31, 2023 based on the 2013 framework set forth in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our
internal control over financial reporting was effective as of December 31, 2023.
Ernst & Young LLP has issued an attestation report on the effectiveness of our internal control over financial reporting. Their report is set forth below.
60
To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc.
Report of Independent Registered Public Accounting Firm
Opinion on Internal Control over Financial Reporting
We have audited Vishay Intertechnology, Inc.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In
our opinion, Vishay Intertechnology, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31,
2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance
sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders’ equity,
and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 16, 2024 expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express
an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 16, 2024
61
Item 9B.
OTHER INFORMATION
None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading
arrangement (as defined in Item 408(c) of Regulation S-K) during the fiscal quarter ended December 31, 2023.
Item 9C.
None.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
Item 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
We have a code of ethics applicable to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer or Controller, and financial managers. The
text of this code has been posted on our website. To view the code, go to our website at ir.vishay.com and click on Corporate Governance. You can obtain a
printed copy of this code, free of charge, by contacting us at the following address:
Corporate Investor Relations
Vishay Intertechnology, Inc.
63 Lancaster Avenue
Malvern, PA 19355-2143
It is our intention to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or any waiver from, a provision of this code by
posting such information on our website, at the aforementioned address and location.
Certain information required under this Item with respect to our Executive Officers is set forth in Part I hereof under the caption “Executive Officers of the
Registrant.”
Other information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most
recent fiscal year end, and is incorporated herein by reference.
Item 11.
EXECUTIVE COMPENSATION
Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent
fiscal year end, and is incorporated herein by reference.
Item 12.
STOCKHOLDER MATTERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent
fiscal year end, and is incorporated herein by reference.
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent
fiscal year end, and is incorporated herein by reference.
Item 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
Information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days of December 31, 2023, our most recent
fiscal year end, and is incorporated herein by reference.
62
Item 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
PART IV
(a) Documents Filed as Part of Form 10-K
1.
Financial Statements
The Consolidated Financial Statements for the year ended December 31, 2023 are filed herewith. See Index to the Consolidated Financial Statements on
page F-1 of this report.
2.
Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable, not material, or the required information is shown in the consolidated
financial statements or the notes thereto.
3.
Exhibits
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
4.5
4.6
10.1†
10.2†
10.3†
10.4†
10.5†
10.6†
10.7†
10.8†
10.9†
Corrected Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc. dated June 5, 2012. Incorporated by
reference to Exhibit 3.1 to our current report on Form 8-K filed June 5, 2012.
Amended and Restated Bylaws dated June 1, 2011. Incorporated by reference to Exhibit 3.2 to our current report on Form 8-K filed
June 2, 2011.
First Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K,
filed on August 11, 2015.
Second Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K,
filed on February 21, 2023.
Indenture, dated as of June 12, 2018, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, N.A., as Trustee.
Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed June 13, 2018.
Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2025 (included as Exhibit A to
the Indenture filed as Exhibit 4.5). Incorporated by reference to Exhibit 4.2 to our current report on Form 8-K, filed on June 13, 2018.
Description of Capital Stock. Incorporated by reference to Exhibit 4.1 to our quarterly report on Form 10-Q for the fiscal quarter
ended October 1, 2022.
First Supplemental Indenture, dated as of December 23, 2020, by and between Vishay Intertechnology, Inc. and HSBC Bank USA,
N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed January 5, 2021.
Indenture, dated as of September 12, 2023, by and between Vishay Intertechnology, Inc. and HSBC Bank USA, National Association,
as Trustee. Incorporated by reference to Exhibit 4.1 in our current report on Form 8-K filed September 12, 2023.
Form of Global Note, representing Vishay Intertechnology, Inc.'s 2.25% Senior Convertible Notes due 2030 (included as Exhibit A to
the Indenture filed as Exhibit 4.1). Incorporated by reference to Exhibit 4.2 in our current report on Form 8-K filed September 12,
2023.
Amended and restated Vishay Intertechnology 162(m) Cash Bonus Plan. Incorporated by reference to Annex A to our Proxy
Statement, dated March 31, 2017, for our 2017 Annual Meeting of Stockholders.
Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program. Incorporated by reference to Annex A to our
definitive proxy statement, dated April 4, 2014, for our 2014 Annual Meeting of Stockholders.
Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program (Including Restated Annex A – Israel).
Incorporated by reference to Exhibit 10.3 to our annual report on Form 10-K for the year ended December 31, 2022.
Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan. Incorporated by reference to Annex A to our definitive proxy statement,
dated April 4, 2023, for our 2023 Annual Meeting of Stockholders.
Employment agreement, dated January 1, 2004, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal
quarter ended October 2, 2004.
Amendment to Employment Agreement, dated August 8, 2010, between Vishay Europe GmbH (an indirect wholly owned subsidiary of
Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for
the fiscal quarter ended July 3, 2010.
Amendment to Employment Agreement, dated August 28, 2011, between Vishay Europe GmbH (an indirect wholly owned subsidiary of
Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for
the fiscal quarter ended October 1, 2011.
Amendment to Employment Agreement, dated July 1, 2021, between Vishay Europe GmbH (an indirect wholly owned subsidiary of
Vishay Intertechnology, Inc.), Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), and Dr.
Gerald Paul. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2021.
Employment Agreement, dated January 1, 2004, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.)
and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended
October 2, 2004.
63
10.10†
10.11†
10.12†
10.13†
10.14†
10.15†
10.16†
10.17†
10.18†
10.19†
10.20†
10.21†
10.22†
10.23†
10.24†
10.25†
10.26†
10.27†
10.28†
10.29†
10.30†
10.31†
10.32†
Amendment to Employment Agreement, dated August 8, 2010, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the fiscal
quarter ended July 3, 2010.
Amendment to Employment Agreement, dated August 30, 2011, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal
quarter ended October 1, 2011.
Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the
fiscal quarter ended April 3, 2021.
Amendment to Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K, filed July 18,
2022.
Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.5 to our current report
on Form 8-K, filed on February 16, 2018.
Amendment to Employment Agreement between Vishay Dale Electronics, LLC (a wholly owned subsidiary of Vishay Intertechnology,
Inc.), Vishay Intertechnology, Inc., and Joel Smejkal dated May 20, 2020. Incorporated by reference to Exhibit 10.1 to our quarterly
report on Form 10-Q for the fiscal quarter ended July 4, 2020.
Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Dale Electronics, LLC (a wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.6 to
our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Dale Electronics LLC (a wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Joel Smejkal. Incorporated by reference to Exhibit 10.2 to
our current report on Form 8-K, filed July 18, 2022.
Employment Agreement, dated February 15, 2018, between Vishay Europe GmbH (an indirect wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1 to our current report
on Form 8-K, filed on February 16, 2018.
First Amendment to Employment Agreement, dated February 28, 2020, between Vishay Europe GmbH (an indirect wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.1
to our current report on Form 8-K, filed February 28, 2020.
Second Amendment to Employment Agreement, dated February 23, 2021, between Vishay Europe GmbH (an indirect wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.2
to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Third Amendment to Employment Agreement, dated July 14, 2022, between Vishay Europe GmbH (an indirect wholly owned subsidiary
of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Lori Lipcaman. Incorporated by reference to Exhibit 10.3 to our
current report on Form 8-K, filed July 18, 2022.
Terms and Conditions of Johan Vandoorn Employment Agreement, dated January 16, 2012. Incorporated by reference to Exhibit 10.31
to our 2011 annual report on Form 10-K.
Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 4, 2014. Incorporated by reference to
Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2014.
Second Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 3, 2015. Incorporated by
reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended April 4, 2015.
Third Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 15, 2018. Incorporated by
reference to Exhibit 10.2 to our current report on Form 8-K, filed on February 16, 2018.
Fourth Amendment to the Terms and Conditions of Johan Vandoorn Employment Agreement, dated February 23, 2021. Incorporated
by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Transition Agreement, dated July 15, 2022, between Vishay Capacitors Belgium NV (an indirect wholly owned subsidiary of Vishay
Intertechnology, Inc.) and Johan Vandoorn. Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the
fiscal quarter ended October 1, 2022.
Employment Agreement, dated February 15, 2018, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.3 to our current report
on Form 8-K, filed on February 16, 2018.
First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Americas, Inc. (a wholly owned subsidiary of
Vishay Intertechnology, Inc.) Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.4 to our
quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Transition Agreement, dated July 15, 2022, between Vishay Americas, Inc. (a wholly owned subsidiary of Vishay Intertechnology, Inc.),
Vishay Intertechnology, Inc., and David Valletta. Incorporated by reference to Exhibit 10.9 to our quarterly report on Form 10-Q for
the fiscal quarter ended October 1, 2022.
Employment Agreement, dated February 15, 2018, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.4 to our current report
on Form 8-K, filed on February 16, 2018.
First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Singapore Pte. Ltd. (an indirect wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.5
to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
64
10.33†
10.34†
10.35†
10.36†
10.37†
10.38†
10.39†
10.40†
10.41†
10.42†
10.43
10.44
10.45
10.46
10.47*
10.48*
10.49*
10.50*
10.51*
10.52
10.53*
10.54*
10.55
10.56
10.57
Transition Agreement, dated July 15, 2022, between Vishay Singapore Pte. Ltd. (an indirect wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and Clarence Tse. Incorporated by reference to Exhibit 10.10 to our quarterly
report on Form 10-Q for the fiscal quarter ended October 1, 2022.
Employment Agreement between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology,
Inc., and Jeffrey Webster dated May 20, 2020. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the
fiscal quarter ended July 4, 2020.
First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Israel Ltd. (a wholly owned subsidiary of
Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeffrey Webster. Incorporated by reference to Exhibit 10.7 to our
quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Israel Ltd. (a wholly owned subsidiary of Vishay
Intertechnology, Inc.), Vishay Intertechnology, Inc., and Jeff Webster. Incorporated by reference to Exhibit 10.4 to our current report
on Form 8-K, filed July 18, 2022.
Employment Agreement, dated July 14, 2022, between Siliconix incorporated (a wholly owned subsidiary of Vishay Intertechnology,
Inc.), Vishay Intertechnology, Inc. and Roy Shoshani. Incorporated by reference to Exhibit 10.5 to our current report on Form 8-K,
filed July 18, 2022.
Employment Agreement between Vishay Electronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.), Vishay
Intertechnology, Inc., and Andreas Randebrock dated May 20, 2020. Incorporated by reference to Exhibit 10.3 to our quarterly report
on Form 10-Q for the fiscal quarter ended July 4, 2020.
First Amendment to Employment Agreement, dated February 23, 2021, between Vishay Electronic GmbH (an indirect wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to
Exhibit 10.8 to our quarterly report on Form 10-Q for the fiscal quarter ended April 3, 2021.
Second Amendment to Employment Agreement, dated July 14, 2022, between Vishay Electronic GmbH (an indirect wholly owned
subsidiary of Vishay Intertechnology, Inc.), Vishay Intertechnology, Inc., and Andreas Randebrock. Incorporated by reference to
Exhibit 10.6 to our current report on Form 8-K, filed July 18, 2022.
Second Amended and Restated Employment Agreement, dated July 14, 2022, between Vishay Intertechnology, Inc. and Peter Henrici.
Incorporated by reference to Exhibit 10.7 to our current report on Form 8-K, filed July 18, 2022.
Vishay Intertechnology, Inc. Key Employee Wealth Accumulation Plan (as amended and restated, effective January 1, 2017).
Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 23, 2016.
Master Separation and Distribution Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision
Group, Inc. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June 23, 2010.
Employee Matters Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. and Vishay Precision Group, Inc.
Incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed June 23, 2010.
Tax Matters Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc. Incorporated by
reference to Exhibit 10.1 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Trademark License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Intertechnology, Inc.
Incorporated by reference to Exhibit 10.2 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Supply Agreement, dated July 6, 2010, between Vishay Advanced Technology, Ltd. And Vishay Dale Electronics, Inc. Incorporated by
reference to Exhibit 10.4 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Patent License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay Dale Electronics, Inc. Incorporated by
reference to Exhibit 10.6 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Supply Agreement, dated July 6, 2010, between Vishay Dale Electronics, Inc. and Vishay Advanced Technology, Ltd. Incorporated by
reference to Exhibit 10.8 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Supply Agreement, dated July 6, 2010, between Vishay Measurements Group, Inc. and Vishay S.A. Incorporated by reference to
Exhibit 10.9 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Manufacturing Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH. Incorporated by reference to
Exhibit 10.10 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH. Incorporated by
reference to Exhibit 10.11 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Supply Agreement, dated July 6, 2010, between Vishay Precision Foil GmbH and Vishay S.A. Incorporated by reference to Exhibit
10.12 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Measurements Group, Inc. Incorporated
by reference to Exhibit 10.13 to Vishay Precision Group, Inc.’s current report on Form 8-K filed July 7, 2010.
Credit Agreement, dated as of June 5, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., as administrative
agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed June
5, 2019.
Amendment No. 1 to Credit Agreement, dated as of September 20, 2019, among Vishay Intertechnology, Inc. and JPMorgan Chase
Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our quarterly
report on Form 10-Q for the fiscal quarter ended September 28, 2019.
Amendment and Restatement Agreement, dated as of May 8, 2023 among Vishay Intertechnology, Inc. and JPMorgan Chase Bank,
N.A., as administrative agent, and the lenders and other parties thereto. Incorporated by reference to Exhibit 10.1 to our current report
on Form 8-K, filed May 8, 2023.
65
10.58†
10.59†
10.60†
10.61†
10.62†
10.63
10.64
10.66†**
10.67†**
21**
23.1**
31.1**
31.2**
32.1**
32.2**
97.1**
101**
Vishay Intertechnology, Inc. Form of Executive Officer Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.1 in
our quarterly report on Form 10-Q for the fiscal quarter ended April 1, 2023.
Vishay Intertechnology, Inc. Form of Non-Employee Director Restricted Stock Unit Agreement. Incorporated by reference to Exhibit
10.48 to our 2019 annual report on Form 10-K.
Vishay Intertechnology, Inc. Form of Executive Officer Phantom Stock Unit Agreement. Incorporated by reference to Exhibit 10.50 to
our 2019 annual report on Form 10-K.
Vishay Intertechnology, Inc. Non-Employee Director Compensation Plan. Incorporated by reference to Exhibit 10.44 to our 2020
annual report on Form 10-K.
Form of Future Deferred Remuneration Arrangement of Vishay Israel Ltd. (a wholly owned subsidiary of Vishay Intertechnology,
Inc.). Incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed December 28, 2021.
Form of Base Capped Call Confirmation. Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K filed
September 12, 2023.
Form of Additional Capped Call Confirmation. Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K filed
September 12, 2023.
Form of Phantom Stock Award Agreement.
Form of Non-Employee Director RSU Agreement.
Subsidiaries of the Registrant.
Consent of Independent Registered Public Accounting Firm.
Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer.
Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer.
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief
Executive Officer.
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief
Financial Officer.
Vishay Intertechnology, Inc. Dodd-Frank Clawback Policy
Interactive Data File (Annual Report on Form 10-K, for the year ended December 31, 2023, furnished in iXBRL (Inline eXtensible
Business Reporting Language)).
Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language and contained in Exhibit 101)
104**
__________________
* Confidential treatment has been requested by, and accorded to, VPG with respect to certain portions of this Exhibit. Omitted portions have been filed separately by VPG with the
Securities and Exchange Commission.
** Filed herewith.
† Denotes a management contract or compensatory plan, contract, or arrangement.
Item 16.
FORM 10-K SUMMARY
Not applicable.
66
Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SIGNATURES
VISHAY INTERTECHNOLOGY, INC.
By:/s/ Joel Smejkal
Joel Smejkal
President and Chief Executive Officer
February 16, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated below.
Signature
Principal Executive Officer:
/s/ Joel Smejkal
Joel Smejkal
Principal Financial and Accounting Officer:
Title
Date
President, Chief Executive Officer,
and Director
February 16, 2024
/s/ Lori Lipcaman
Lori Lipcaman
Board of Directors:
/s/ Marc Zandman
Marc Zandman
/s/ Renee B. Booth
Dr. Renee B. Booth
/s/ Michael J. Cody
Michael J. Cody
/s/ Michiko Kurahashi
Dr. Michiko Kurahashi
/s/ Abraham Ludomirski
Dr. Abraham Ludomirski
/s/ John Malvisi
John Malvisi
/s/ Ziv Shoshani
Ziv Shoshani
/s/ Timothy V. Talbert
Timothy V. Talbert
/s/ Jeffrey H. Vanneste
Jeffrey H. Vanneste
/s/ Ruta Zandman
Ruta Zandman
/s/ Raanan Zilberman
Raanan Zilberman
Executive Vice President and Chief
Financial Officer
February 16, 2024
Executive Chairman of
the Board of Directors
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
February 16, 2024
67
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68
Vishay Intertechnology, Inc.
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID:42)
Audited Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity
Notes to the Consolidated Financial Statements
F-2
F-4
F-6
F-7
F-8
F-9
F-10
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Vishay Intertechnology, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Vishay Intertechnology, Inc. (the Company) as of December 31, 2023 and 2022, and the
related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended
December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal
control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements
based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be
communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
account or disclosure to which it relates.
F-2
Description of
Matter
the
Sales Returns and Allowances Accruals
At December 31, 2023, the Company’s liability for sales returns and allowances was $47.8 million. As discussed in Note 1 of the
consolidated financial statements, the Company recognizes the estimated variable consideration to be received as revenue from
contracts with customers and recognizes a related accrued liability for estimated future credits that will be issued to its customers,
primarily distributors, for product returns, scrap allowance, “stock, ship and debit”, and price protection programs with those
customers.
Auditing management’s sales returns and allowances accruals specifically related to the scrap allowance and “stock, ship and debit”
programs was especially challenging because of the judgement used by management to determine the amount of future credits that will
be issued to customers for sales that were recognized during the period. Estimating the scrap allowance and "stock, ship and debit"
accrual involves the application of models which require management to make certain assumptions including historical customer credit
rates.
How We Addressed
the Matter
in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s sales
returns and allowances review process for the scrap allowance and “stock, ship and debit” programs, including testing controls over
management’s review of the reserve calculation and the underlying assumptions used to develop the estimates.
To test the estimated sales returns and allowances accruals for the scrap allowance and “stock, ship and debit” programs, we
performed audit procedures that included, among others, assessing methodologies and testing the assumptions discussed above and
the completeness and accuracy of the underlying data used by the Company in its analyses. We inspected contracts with customers in
evaluating whether the assumptions used by management agreed with the terms and conditions of the contracts. In addition, we
compared the assumptions used by management to actual historical credit experience. We also assessed the historical accuracy of
management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the accruals that would
result from changes in the assumptions.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 1968.
Philadelphia, Pennsylvania
February 16, 2024
F-3
VISHAY INTERTECHNOLOGY, INC.
Consolidated Balance Sheets
(In thousands, except share amounts)
Assets
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net of allowances for credit losses of $1,705 and $1,324, respectively
Inventories:
Finished goods
Work in process
Raw materials
Total inventories
Prepaid expenses and other current assets
Total current assets
Property and equipment, at cost:
Land
Buildings and improvements
Machinery and equipment
Construction in progress
Allowance for depreciation
Property and equipment, net
Right of use assets
Deferred income taxes
Goodwill
Other intangible assets, net
Other assets
Total assets
Continues on following page.
December 31,
2023
December 31,
2022
$
972,719
$
610,825
35,808
305,272
426,674
416,178
167,083
267,339
213,098
647,520
156,234
261,345
201,300
618,879
214,443
2,297,164
170,056
2,121,210
77,006
719,387
3,053,868
290,593
(2,846,208)
1,294,646
75,907
658,829
2,857,636
243,038
(2,704,951)
1,130,459
126,829
137,394
201,416
131,193
104,667
201,432
72,333
77,896
110,141
4,239,923
$
98,796
3,865,653
$
F-4
VISHAY INTERTECHNOLOGY, INC.
Consolidated Balance Sheets (continued)
(In thousands, except share amounts)
Liabilities and equity
Current liabilities:
Trade accounts payable
Payroll and related expenses
Lease liabilities
Other accrued expenses
Income taxes
Total current liabilities
Long-term debt, less current portion
U.S. transition tax payable
Deferred income taxes
Long-term lease liabilities
Other liabilities
Accrued pension and other postretirement costs
Total liabilities
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $1.00 per share: authorized - 1,000,000 shares; zero issued
Common stock, par value $0.10 per share: authorized - 300,000,000 shares; 133,187,901 and 132,911,771 shares
outstanding
Class B convertible common stock, par value $0.10 per share: authorized - 40,000,000 shares; 12,097,148 shares
outstanding
Capital in excess of par value
Retained earnings
Treasury stock (at cost): 7,535,881 and 4,240,573 common shares
Accumulated other comprehensive income (loss)
Total Vishay stockholders' equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes.
December 31,
2023
December 31,
2022
$
$
$
191,002
161,940
26,485
239,350
73,098
691,875
818,188
47,027
95,776
102,830
87,918
195,503
2,039,117
189,099
166,079
25,319
261,606
84,155
726,258
500,937
83,010
117,183
108,493
92,530
187,092
1,815,503
-
-
13,319
13,291
1,210
1,291,499
1,041,372
(161,656)
10,337
2,196,081
4,725
2,200,806
4,239,923
$
1,210
1,352,321
773,228
(82,972)
(10,827)
2,046,251
3,899
2,050,150
3,865,653
F-5
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
Net revenues
Costs of products sold
Gross profit
Selling, general, and administrative expenses
Operating income
Other income (expense):
Interest expense
Other
Loss on early extinguishment of debt
Total other income (expense)
Income before taxes
Income tax expense
Net earnings
Less: net earnings attributable to noncontrolling interests
Net earnings attributable to Vishay stockholders
Basic earnings per share attributable to Vishay stockholders:
Diluted earnings per share attributable to Vishay stockholders:
Weighted average shares outstanding - basic
Weighted average shares outstanding - diluted
Cash dividends per share
See accompanying notes.
Years ended December 31,
2022
2023
2021
$
$
3,402,045
2,427,552
974,493
$
3,497,401
2,438,412
1,058,989
3,240,487
2,352,574
887,913
488,349
486,144
443,503
615,486
420,111
467,802
(25,131)
25,263
(18,874)
(18,742)
467,402
141,889
(17,129)
(4,852)
-
(21,981)
593,505
163,022
(17,538)
(15,654)
-
(33,192)
434,610
135,673
325,513
430,483
298,937
1,693
1,673
967
323,820
$
428,810
$
297,970
2.32
$
2.99
$
2.31
$
2.98
$
139,447
140,246
143,399
143,915
2.05
2.05
145,005
145,495
$
$
$
$
0.400
$
0.400
$
0.385
F-6
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(In thousands)
Net earnings
Other comprehensive income (loss), net of tax
Pension and other post-retirement actuarial items
Foreign currency translation adjustment
Other comprehensive income (loss)
Comprehensive income
Years ended December 31,
2022
2023
2021
$
325,513
$
430,483
$
298,937
(7,001)
51,310
18,167
28,165
21,164
(41,885)
(51,978)
9,425
(33,811)
346,677
439,908
265,126
Less: comprehensive income attributable to noncontrolling interests
1,693
1,673
967
Comprehensive income attributable to Vishay stockholders
$
344,984
$
438,235
$
264,159
See accompanying notes.
F-7
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Cash Flows
(In thousands)
Operating activities
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
Gain on disposal of property and equipment
Inventory write-offs for obsolescence
Pensions and other postretirement benefits, net of contributions
Stock compensation expense
Loss on early extinguishment of debt
Deferred income taxes
Other operating activities
Change in U.S. transition tax liability
Change in repatriation tax liability
Net change in operating assets and liabilities, net of effects of businesses acquired
Net cash provided by operating activities
Investing activities
Capital expenditures
Proceeds from sale of property and equipment
Purchase of and deposits for businesses, net of cash acquired
Purchase of short-term investments
Maturity of short-term investments
Other investing activities
Net cash used in investing activities
Financing activities
Proceeds from long-term borrowings
Repurchase of convertible debt instruments
Net proceeds (payments) on revolving credit facility
Debt issuance costs
Cash paid for capped call
Dividends paid to common stockholders
Dividends paid to Class B common stockholders
Repurchase of common stock held in treasury
Distributions to noncontrolling interests
Cash withholding taxes paid when shares withheld for vested equity awards
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Years ended December 31,
2022
2023
2021
$
325,513
$
430,483
$
298,937
184,373
(554)
37,426
(9,559)
16,532
18,874
36,783
9,442
(27,670)
(63,600)
(161,857)
365,703
(329,410)
1,156
(13,753)
(117,523)
387,898
(1,219)
(72,851)
750,000
(386,745)
(42,000)
(26,823)
(94,200)
(50,787)
(4,839)
(78,684)
(867)
(3,994)
61,061
7,981
163,991
(455)
26,898
(615)
6,545
-
38,677
835
(14,757)
(25,201)
(142,113)
484,288
(325,308)
1,198
(50,000)
(285,956)
132,901
(1,766)
(528,931)
-
-
42,000
-
-
(52,348)
(4,839)
(82,972)
(741)
(2,123)
(101,023)
(17,617)
167,037
(303)
20,657
2,106
6,605
-
50,613
9,621
(14,757)
-
(83,412)
457,104
(218,372)
1,317
(20,847)
(140,603)
147,893
129
(230,483)
-
(300)
-
-
-
(51,094)
(4,657)
-
(800)
(1,963)
(58,814)
(13,573)
Net increase (decrease) in cash and cash equivalents
361,894
(163,283)
154,234
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See accompanying notes
610,825
972,719
$
774,108
610,825
$
619,874
774,108
$
F-8
VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts)
Class B
Convertible
Common
Stock
Capital in
Excess of
Par
Value
Common
Stock
Retained
Earnings
(Accumulated
Deficit)
Treasury Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total Vishay
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
$
13,256
$
1,210
$ 1,409,200
$
138,990
$
$
13,559
$
1,576,215
$
2,800
$ 1,579,015
Balance at December 31, 2020
Cumulative effect of accounting change
for adoption of ASU 2020-06
Net earnings
Other comprehensive income (loss)
Distributions to noncontrolling interests
Issuance of stock and related tax
withholdings for vested restricted stock
units (149,722 shares)
Dividends declared ($0.385 per share)
Stock compensation expense
Balance at December 31, 2021
Net earnings
Other comprehensive income
Distributions to noncontrolling interests
Issuance of stock and related tax
withholdings for vested restricted stock
units (201,039 shares)
Dividends declared ($0.400 per share)
Stock compensation expense
Repurchase of common stock held in
treasury (4,240,573 shares)
Balance at December 31, 2022
Net earnings
Other comprehensive income
Distributions to noncontrolling interests
Issuance of stock and related tax
withholdings for vested restricted stock
units (276,130 shares)
Dividends declared ($0.400 per share)
Stock compensation expense
Repurchase of common stock held in
treasury (3,295,308 shares)
Capped call transactions, net of tax
Balance at December 31, 2023
See accompanying notes.
$
$
-
-
-
-
(66,078)
-
-
-
20,566
297,970
-
-
-
-
-
-
15
-
-
13,271
-
-
-
20
-
-
$
-
-
-
1,210
-
-
-
(1,978)
81
6,605
$ 1,347,830
-
-
-
$
-
-
-
(2,143)
89
6,545
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(33,811)
-
-
-
-
$
(20,252) $
-
9,425
-
-
-
-
(45,512)
297,970
(33,811)
-
(1,963)
(55,751)
6,605
1,743,753
428,810
9,425
-
$
(2,123)
(57,187)
6,545
$
-
13,291
-
-
-
-
1,210
-
-
-
-
$ 1,352,321
-
-
-
$
$
(82,972)
(82,972)
-
-
-
-
(10,827) $
-
21,164
-
$
(82,972)
2,046,251
323,820
21,164
-
-
967
-
(800)
(45,512)
298,937
(33,811)
(800)
-
-
-
2,967
1,673
-
(741)
(1,963)
(55,751)
6,605
$ 1,746,720
430,483
9,425
(741)
-
-
-
(2,123)
(57,187)
6,545
-
3,899
1,693
-
(867)
(82,972)
$ 2,050,150
325,513
21,164
(867)
28
-
-
-
-
-
-
-
13,319
$
-
-
1,210
$
(4,022)
50
16,532
-
(73,382)
$ 1,291,499
$
1,041,372
$
-
-
-
-
-
-
(3,994)
(55,626)
16,532
-
-
-
(3,994)
(55,626)
16,532
(78,684)
-
(161,656)
$
-
-
10,337
$
(78,684)
(73,382)
2,196,081
$
-
-
4,725
(78,684)
(73,382)
$ 2,200,806
-
(55,832)
$
-
401,694
428,810
-
-
-
(57,276)
-
$
-
773,228
323,820
-
-
-
(55,676)
-
-
-
F-9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Vishay Intertechnology, Inc. (“Vishay” or the “Company”) manufactures one of the world’s largest portfolios of discrete semiconductors and passive electronic
components that are essential to innovative designs in the automotive, industrial, military, aerospace, medical, power supplies, telecommunications, consumer
products, and computing end markets. Semiconductors include MOSFETs, diodes, and optoelectronic components. Passive components include resistors,
inductors, and capacitors.
Note 1 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make
estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ significantly
from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of Vishay and all of its subsidiaries in which a controlling financial interest is maintained. For those
consolidated subsidiaries in which the Company’s ownership is less than 100 percent, the outside stockholders’ interests are shown as noncontrolling interests in
the accompanying consolidated balance sheets. Investments in affiliates over which the Company has significant influence but not a controlling interest are carried
on the equity basis. Investments in affiliates over which the Company does not have significant influence are accounted for by the cost method. All intercompany
transactions, accounts, and profits are eliminated.
Revenue Recognition
The Company recognizes revenue from contracts with customers when it satisfies the performance obligations within the contract. The Company has framework
agreements with many of its customers that contain the terms and conditions of future sales, but do not create enforceable rights or obligations. For revenue
recognition purposes, the Company considers the combined purchase orders and the terms and conditions contained within such framework agreements to be
contracts.
Payment terms for the Company's sales are generally less than sixty days. Substantially all of the Company's receivables historically have been and are expected to
continue to be collected within twelve months of the transfer of products to the customer and the Company expects this to continue going forward. Accordingly,
the Company does not recognize a financing component of the transaction price.
Revenue is measured based on the consideration specified in contracts with customers, and excludes any sales incentives and amounts collected on behalf of third
parties. The Company recognizes revenue when it satisfies its performance obligations. The Company analyzes its contracts to determine whether the promise in
the contract to construct and transfer goods to the customer is a performance obligation that will be satisfied over time or at a point in time. When the Company's
performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to
date, the Company transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over time. The
Company has a limited number of contracts for custom products that meet the criteria to recognize revenue over time.
The Company's contracts contain two performance obligations: delivery of products and warranty protection. The Company does not sell separate, enhanced, or
extended warranty coverage, but through its customary business practices, the Company has created implied service-type warranties, which are accounted for as
separate performance obligations. Revenue is allocated between these two performance obligations and recognized as the obligations are satisfied. The allocation
of revenue to warranty protection is based on an estimate of expected cost plus margin. The delivery of products performance obligation is satisfied and product
sales revenue is recognized when the customer takes control of the products. Warranty revenue is deferred and the warranty protection performance obligation is
satisfied and revenue is recognized over the warranty period, which is typically less than twenty four months from sale to end customer. The warranty deferred
revenue liability is recorded within Other Accrued Expenses and Other Liabilities on the accompanying consolidated balance sheets. The deferred revenue balance
associated with the service-type warranty performance obligations and the components that comprise the change in the deferred revenue balance are not significant.
The Company has a broad line of products that it sells to original equipment manufacturers ("OEMs"), electronic manufacturing services ("EMS") companies, which
manufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic components for resale to OEMs and EMS
companies.
F-10
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Summary of Significant Accounting Policies (continued)
The Company recognizes revenue on sales to distributors when the distributor takes control of the products ("sold-to" model). The Company has agreements with
distributors that allow distributors a limited credit for unsaleable products, which it terms a "scrap allowance." Consistent with industry practice, the Company also
has a "stock, ship and debit" program whereby it considers requests by distributors for credits on previously purchased products that remain in distributors'
inventory, to enable the distributors to offer more competitive pricing. In addition, the Company has contractual arrangements whereby it provides distributors with
protection against price reductions initiated by the Company after product is sold by the Company to the distributor and prior to resale by the distributor.
The Company recognizes the estimated variable consideration to be received as revenue and records a related accrued expense for the consideration not expected
to be received, based upon its estimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable to
sales recorded through the end of the period. The Company makes these estimates based upon sales levels to its distributors during the period, inventory levels at
the distributors, current and projected market conditions, and historical experience under the programs. The Company utilizes a number of different methodologies
and considers several factors when estimating the accruals. Some of the factors considered include sales levels to distributors during the relevant period, inventory
levels at the distributors, current and projected market trends and conditions, recent and historical activity under the relevant programs, changes in program
policies, and open requests for credits. These procedures require the exercise of significant judgments. The Company believes that it has a reasonable basis to
estimate future credits under the programs. See sales returns and allowances accrual activity in Note 9.
The Company pays commissions to external sales representatives on a per-sale basis. Accordingly, these commissions are expensed as incurred because the future
amortization period of the asset that the Company otherwise would have recognized is one year or less. Internal staff are not paid commissions.
The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the product even if the shipping and handling activities
are performed after the customer obtains control. The Company does not evaluate whether shipping and handling activities are promised services to its customers.
If control transfers and revenue is recognized for the related products before the shipping and handling activities occur, the related costs of those shipping and
handling activities is accrued. The Company applies this accounting policy election consistently to similar types of transactions.
See disaggregated revenue information in Note 15.
Research and Development Expenses
Research and development costs are expensed as incurred. The amount charged to expense for research and development (exclusive of purchased in-process
research and development) aggregated $99,506, $81,182, and $77,377, for the years ended December 31, 2023, 2022, and 2021, respectively. The Company
spends additional amounts for the development of machinery and equipment for new processes and for cost reduction measures.
Income Taxes
The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent
the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents
income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and
tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances have been
established for deferred tax assets which the Company believes do not meet GAAP criteria of “more likely than not” to be realized. This criterion requires a level
of judgment regarding future taxable income, which may be revised due to changes in market conditions, tax laws, or other factors. If the Company’s assumptions
and estimates change in the future, valuation allowances established may be increased, resulting in increased tax expense. Conversely, if the Company is ultimately
able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been established, then the related portion of the valuation allowance can
be released, resulting in decreased tax expense.
The Company and its subsidiaries are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the
Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for
which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to
which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite the Company’s
belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances and the provision for
income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.
These accruals for tax-related uncertainties are based on management’s best estimate of potential tax exposures. When particular matters arise, a number of years
may elapse before such matters are audited by tax authorities and finally resolved. Favorable resolution of such matters could be recognized as a reduction to the
Company’s effective tax rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of
cash in the year of resolution. The amount included in current liabilities on the accompanying consolidated balance sheets reflect only amounts expected to be
settled in cash within one year.
See Note 5.
F-11
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Summary of Significant Accounting Policies (continued)
Cash, Cash Equivalents, and Short-Term Investments
Cash and cash equivalents includes demand deposits and highly liquid investments with maturities of three months or less when purchased. Highly liquid investments
with original maturities greater than three months, but less than one year are classified as short-term investments. At December 31, 2023 and 2022, the
Company’s short-term investments were comprised of time deposits with financial institutions whose original maturity exceeds three months, but less than one year.
Allowance for Credit Losses
The Company estimates its credit losses on financial instruments using a current expected credit loss model. The Company maintains an allowance for accounts
receivable credit losses resulting from the inability of its customers to make required payments. Payment terms for the Company's sales are generally less than
ninety days. Substantially all of the Company's trade receivables are collected within twelve months of the transfer of products to the customer and the Company
expects this to continue going forward. The credit loss allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that
are based on historical trends and an evaluation of the impact of current and projected economic conditions. Receivables from customers with deteriorating
financial condition and those over 180 days past due are removed from the pool and evaluated separately. Net credit loss expense for accounts receivable was
$369, $365, and $384 for the years ended December 31, 2023, 2022, and 2021, respectively.
The Company’s cash equivalents, short-term investments, and restricted investments are accounted for as held-to-maturity debt instruments, at amortized cost.
Interest income on these instruments is recorded as "Other income" on the consolidated statements of operations and interest receivable is recognized as a separate
asset and recorded in "Prepaid expenses and other current assets" on the consolidated balance sheets. The Company has not experienced a credit loss on the
principal or interest receivable of its cash equivalents, short-term investments, or restricted investments. The Company pools its cash equivalents, short-term
investments, and restricted investments by credit rating of the issuing financial institution and estimates an allowance for credit losses based on the corporate bond
default ratios, evaluation of the impact of current and projected economic conditions, and probability of credit loss. Net credit loss expense for cash equivalents,
short-term investments, and restricted investments was immaterial for the years ended December 31, 2023 and 2022. The Company does not measure an
allowance for credit losses on interest receivable. Any uncollectible interest receivable is recognized by reversing interest income within the fiscal quarter that the
interest becomes uncollectible.
Inventories
Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. Inventories are adjusted for estimated obsolescence
and written down to net realizable value based upon estimates of future demand, technology developments, and market conditions.
Property and Equipment
Property and equipment is carried at cost and is depreciated principally by the straight-line method based upon the estimated useful lives of the assets. Machinery
and equipment are being depreciated over useful lives of seven years to ten years. Buildings and building improvements are being depreciated over useful lives of
twenty years to forty years. Construction in progress is not depreciated until the assets are placed in service. The estimated cost to complete construction in
progress at December 31, 2023 was approximately $502,500. Included in the estimated cost to complete the Itzehoe, Germany 12-inch wafer fab construction
project are certain costs for which there are currently no contractual commitments to complete. Depreciation expense was $174,457, $155,864, and $159,247
for the years ended December 31, 2023, 2022, and 2021, respectively. Gains and losses on the disposal of assets which do not qualify for presentation as
discontinued operations are included in the determination of operating margin (within selling, general, and administrative expenses). Individually material gains and
losses on disposal are separately disclosed in the notes to the consolidated financial statements.
Commitments and Contingencies
The Company has commitments for the purchase of assets to complete its construction in progress as disclosed above. The commitment period for substantially all
of these purchase commitments is less than one year. The Company expects to have noncancellable purchase commitments with commitment periods in excess of
one year associated with its significant facility expansion programs as the programs progress. As of December 31, 2023, there are no material noncancellable
commitments associated with these programs.
F-12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Summary of Significant Accounting Policies (continued)
Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines, penalties, and other sources are
recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. The costs for a
specific environmental remediation site are discounted if the aggregate amount of the obligation and the amount and timing of the cash payments for that site are
fixed or reliably determinable based upon information derived from the remediation plan for that site. Accrued liabilities for environmental matters recorded at
December 31, 2023 and 2022 do not include claims against third parties.
Goodwill and Other Intangible Assets
Goodwill represents the excess of the cost of a business acquired over the fair value of the related net assets at the date of acquisition. Certain intangible assets
may be assigned indefinite useful lives. Goodwill and indefinite-lived intangible assets are not amortized but rather are tested for impairment at least annually. These
tests are performed more frequently whenever events or changes in circumstances indicate that the assets might be impaired. The Company's business segments
(see Note 15) represent its reporting units for goodwill impairment testing purposes. At December 31, 2023 and 2022, respectively, the Company has no recorded
indefinite-lived intangible assets.
Definite-lived intangible assets are amortized over their estimated useful lives. Patents and acquired technology are being amortized over useful lives of seven years
to twenty-five years. Capitalized software is amortized over periods of three years to ten years, primarily included in "Costs of products sold" on the consolidated
statements of operations. Customer relationships are amortized over useful lives of five years to twenty years. Noncompete agreements are amortized over
periods of three years to ten years. The Company continually evaluates the reasonableness of the useful lives of these assets.
GAAP prescribes a quantitative method for determining goodwill impairment. The Company has the option of performing a qualitative assessment before
performing the quantitative impairment test. If it is determined, on the basis of qualitative factors, that the fair value of the reporting unit is not more likely than not
less than the carrying amount, the quantitative impairment test is not required. If it is determined that the fair value of the reporting unit is more likely than not less
than the carrying amount, the quantitative impairment test is required.
The Company determines the fair value of the reporting unit and compares that fair value to the net book value of the reporting unit. The fair value of the reporting
unit is determined using various valuation techniques, including a comparable companies market multiple approach and a discounted cash flow analysis (an income
approach). If the net book value of the reporting unit were to exceed the fair value, the Company would recognize an impairment charge.
Impairment of Long-Lived Assets
The carrying value of long-lived assets held-and-used, other than goodwill and indefinite-lived intangible assets, is evaluated when events or changes in
circumstances indicate the carrying value may not be recoverable or the useful life has changed. The carrying value of a long-lived asset group is considered
impaired when the total projected undiscounted cash flows from such asset group are separately identifiable and are less than the carrying value. In that event, a
loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined
primarily using present value techniques based on projected cash flows from the asset group. Losses on long-lived assets held-for-sale, other than goodwill and
indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for anticipated disposal costs.
Available-for-Sale Securities
Short-term investments and other assets reported on the accompanying consolidated balance sheets include time deposits with financial institutions whose original
maturity exceeds three months, but less than one year that are classified as held-to-maturity instruments, and investments in marketable securities that are classified
as available-for-sale instruments. The available-for-sale instruments include assets that are held in trust related to the Company’s non-qualified pension and deferred
compensation plans (see Note 11) and assets that are intended to fund a portion of the Company’s other postretirement benefit obligations outside of the U.S.
These assets are reported at fair value, based on quoted market prices as of the end of the reporting period. Unrealized gains and losses are reported as "Other
income (expense)" on the consolidated statements of operations. At the time of sale, the assets that are held in trust related to the Company’s non-qualified pension
and deferred compensation plans, any gains (losses) calculated by the specific identification method are recognized as a reduction (increase) to benefits expense,
within "Selling, general, and administrative expenses" on the consolidated statements of operations.
Financial Instruments
The Company uses financial instruments in the normal course of its business, including from time to time, derivative financial instruments. Additionally, from time to
time, the Company enters into contracts that are not considered derivative financial instruments in their entirety, but that include embedded derivative features.
Other financial instruments include cash and cash equivalents, held-to-maturity short-term investments, accounts receivable, and notes payable. The carrying
amounts of these financial instruments reported on the accompanying consolidated balance sheets approximate their fair values due to the short-term nature of these
assets and liabilities.
F-13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Summary of Significant Accounting Policies (continued)
The fair value measurement accounting guidance establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs to
valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar
assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the Company’s own assumptions.
An asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Stock-Based Compensation
Compensation costs related to stock-based payment transactions are recognized in the consolidated financial statements. The amount of compensation cost is
measured based on the grant-date fair value of the equity (or liability) instruments issued. The Company determines compensation cost for restricted stock units
("RSUs") and phantom stock units based on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required
vesting period for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employee director is required to
provide service in exchange for the award. For RSUs with market conditions, the Company estimates the grant date fair value using a Monte Carlo valuation
model and recognizes the expense for the awards over the period in which the condition is assessed regardless of whether the market condition is ultimately
achieved. For awards subject to graded vesting, the Company recognizes expense over the service period for each separately vesting portion of the award as if
the award was, in-substance, multiple awards. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative
adjustments in the period that the expectation changes.
Foreign Currency Translation
The Company has significant operations outside of the United States. The Company finances its operations in Europe and certain locations in Asia in local
currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. The Company’s operations in Israel and most significant
locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiaries utilize the U.S. dollar as their functional currency.
For those subsidiaries where the local currency is the functional currency, assets and liabilities on the accompanying consolidated balance sheets have been
translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the consolidated results of operations and are reported as a
separate component of stockholders’ equity. Revenues and expenses are translated at the average exchange rate for the year. While the translation of revenues and
expenses into U.S. dollars does not directly impact the statement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of
revenues generated and expenses incurred in those foreign currencies.
For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts are remeasured into U.S. dollars.
Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assets and liabilities are included in the consolidated results of
operations.
Treasury Stock
The Company records treasury stock at cost, inclusive of fees, commissions and other expenses, when outstanding common shares are repurchased.
Self-Insurance Programs
The Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers’ compensation, general liability,
property damage, director and officers’ liability, and vehicle liability.
As part of its self-insurance program for certain risks, the Company created a wholly-owned captive insurance entity in 2007. At December 31, 2023, the captive
insurance entity provides only property and general liability insurance, although it is licensed to also provide directors’ and officers’ insurance. The captive
insurance entity had no amounts accrued for outstanding claims at December 31, 2023 and 2022.
Certain investments held by the captive insurance entity are restricted primarily for the purpose of potential insurance claims. Such amounts are recorded in other
noncurrent assets, and total $10,571 and $9,352 at December 31, 2023 and 2022, respectively, representing required statutory reserves of the captive insurance
entity.
F-14
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 1 – Summary of Significant Accounting Policies (continued)
Leases
The Company leases buildings and machinery and equipment used for manufacturing and/or sales and administrative purposes. The Company is also party to
various service, warehousing, and other agreements that it evaluates for potential embedded leases. Substantially all of the Company’s leases are structured and
classified as operating leases.
The Company leases assets in each region in which it operates. The Company’s leases are generally denominated in the currency of the leased assets' location,
which may not be the functional currency of the subsidiary lessee. Accordingly, the Company remeasures its lease liability and recognizes a transactional gain/loss
for leases denominated in currencies other than the functional currency of the subsidiary lessee.
The Company recognizes right of use assets and lease liabilities for leases greater than twelve months in duration based on the contract consideration for lease
components through the term of the lease and the applicable discount rate. Leases with a duration less than or equal to twelve months are considered short-term
leases. The Company does not recognize right of use assets or lease liabilities for short-term leases and classifies the expense as short-term lease expense.
Variable lease payments based on an index or rate are included in the right of use assets and lease liabilities based on the effective rates at lease commencement.
Changes in the rates or indices do not impact the right of use asset or lease liability and are recognized as a component of lease expense in the consolidated
statements of operations. Variable lease payments not based on an index or rate are not included in the initial right of use asset and lease liability and are
recognized when incurred as a component of lease expense in the consolidated statements of operations.
The Company has elected to not separate contract consideration for lease and non-lease components for its building leases. In addition to the noncancellable
period of a lease, the Company includes periods covered by extension options it is reasonably certain to exercise, termination options that it is reasonably certain
not to exercise, and extension and termination options controlled by the lessor in its determination of the lease term. The Company uses the rate implicit in the
contract whenever possible when determining the applicable discount rate. When the implicit rate is not used, the Company employs a portfolio approach based
on the duration of the lease. The portfolio lease rates are calculated monthly.
No individual lease is considered significant and there are no leases that have not yet commenced that are considered significant.
See Note 4 for additional information.
Restructuring and Severance Costs
Restructuring and severance costs reflect charges resulting from cost reduction programs implemented by the Company. Restructuring and severance costs include
exit costs, severance benefits pursuant to an on-going arrangement, voluntary termination compensation under a defined program, and any related pension
curtailment and settlement charges.
The Company recognizes expense for one-time benefits only after management has committed to a plan, the plan is sufficiently detailed to provide the number,
classification, and location of employees to be terminated as well as the expected completion date, the plan has been sufficiently communicated to employees such
that they are able to determine the type and amount of benefits they will receive if terminated, and it is unlikely that the plan will be significantly changed or
withdrawn. If an employee is not required to render service beyond a minimum retention period, the Company recognizes expense once the aforementioned criteria
have been met. If an employee is required to render service beyond a minimum retention period, the Company recognizes expense over the period that the
employee is required to render future service.
The Company recognizes expense for on-going benefit arrangements when the liability is reasonably estimable and considered probable. The Company recognizes
expense for voluntary separation / early retirement when the employee delivers an irrevocable voluntary termination notice pursuant to a defined Company
program. The Company recognizes other exit costs as incurred.
The Company paid cash of $11,474 in the year ended December 31, 2021 due to a restructuring program announced in 2019. The program was substantially
completed as of December 31, 2021.
Recent Accounting Pronouncements
Recent Accounting Guidance Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures. The
ASU adds reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, requires additional interim
disclosures, and requires other segment-related disclosures. The ASU is effective for the Company for interim and annual periods beginning on or after January 1,
2024, with the ability to early adopt. The Company adopted the ASU effective January 1, 2024. The adoption of the ASU will not impact the Company's
reportable segments' results of operations or cash flows, but will increase its segment disclosures.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year presentation. Such reclassifications had no effect on reported net earnings
attributable to Vishay stockholders, total assets, stockholders' equity, or the statements of cash flows.
F-15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 2 - Acquisition and Divestiture Activities
As part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electronic components. These acquisition
targets include businesses that have established positions in major markets, reputations for product quality and reliability, and product lines with which the Company
has substantial marketing and technical expertise. It also includes certain businesses that possess technologies which the Company expects to further develop and
commercialize.
Year ended December 31, 2023
Neptune 6 Limited
On November 8, 2023, Vishay and Nexperia BV announced that they have entered into an agreement whereby Vishay will acquire Nexperia’s wafer fabrication
facility and operations located in Newport, South Wales, U.K. for approximately $177,000 in cash, subject to customary post-closing adjustments. On November
8, 2023, Vishay remitted $8,750 to an escrow account as a deposit for the acquisition. Such amount is included within "Purchase of and deposits for businesses,
net of cash acquired" on the consolidated statement of cash flows.
To effect the transaction, Vishay will acquire a 100% interest in the legal entity Neptune 6 Limited, and its wholly-owned operating subsidiary, Nexperia Newport
Limited, which owns and operates the Newport facility.
The closing of the transaction is subject to U.K. government review and customary closing conditions, and is expected to occur in the first quarter of 2024.
Centerline Technologies, LLC
On June 30, 2023, the Company acquired substantially all of the assets of Centerline Technologies, LLC ("Centerline"), a Massachusetts-based, privately held
manufacturer of ceramic components used in many custom parts manufactured by certain of Vishay's Resistors businesses, for $5,003. Based on an estimate of
fair values, the Company allocated $1,500 of the purchase price to definite-lived intangible assets. After allocating the purchase price to the assets acquired and
liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $2,213 related to this acquisition. The
acquired business will be vertically integrated into the Company's Resistors segment, and the goodwill related to this acquisition is included in the Resistors reporting
unit for goodwill impairment testing. The results and operations of this acquisition have been included in the Resistors segment since June 30, 2023.
Year ended December 31, 2022
On October 28, 2022, the Company acquired all of the outstanding equity interests of MaxPower Semiconductor, Inc., ("MaxPower"), a San Jose, California-
based fabless power semiconductor provider dedicated to delivering innovative and cost-effective technologies that optimize power management solutions. The
acquisition of MaxPower will enhance Vishay's current and future silicon carbide ("SiC") offerings for fast-growing markets such as electric vehicles.
The Company paid cash of $50,000, net of cash acquired, at closing. The transaction also included possible contingent payments of up to $57,500, which would
be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a third party, and upon the
disposition of MaxPower's investment in an equity affiliate. The purchase price for U.S. GAAP purposes includes the fair value, as of the acquisition date, of
certain future contingent payments to non-employee equity holders of MaxPower. The estimated fair value of this contingent consideration as of the acquisition
date was $6,851. The contingent consideration liability is included in other accrued expenses and other liabilities in the accompanying balance sheet and is
remeasured each reporting period, with changes reported as "Selling, general, and administrative expenses" on the consolidated statements of operations.
A portion of contingent payments to be made to employee equity holders are deemed compensatory in nature. Such payments made to employee equity holders
will be recognized as expense in future periods, and thus are not included in the U.S. GAAP purchase price.
One of the contingencies was resolved in the fourth quarter of 2023, which resulted in no additional payments to the former employees and stockholders of
MaxPower. Significant developments occurred in another of the contingencies in January 2024. The Company's estimate of the maximum possible contingent
payments is $17,500. See Note 18 for further discussion on the fair value measurement of the contingent consideration liability.
Based on an estimate of their fair values, the Company allocated $18,600 of the purchase price to definite-lived intangible assets. After allocating the purchase
price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Company recorded goodwill of $34,246
related to this acquisition. The results and operation of this acquisition have been included in the MOSFETs segment since October 28, 2022. The goodwill
related to this acquisition is included in the MOSFETs reporting unit for goodwill impairment testing.
Year ended December 31, 2021
On December 31, 2021, the Company acquired substantially all of the U.S. assets of Barry Industries, a Massachusetts-based, privately-held manufacturer of
resistive components for $20,847. Based on an estimate of their fair values, the Company allocated $9,600 of the purchase price to definite-lived intangible
assets. After allocating the purchase price to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the
Company recorded goodwill of $7,813 related to this acquisition. The results and operations of this acquisition have been included in the Resistors segment since
December 31, 2021. The goodwill related to this acquisition is included in the Resistors reporting unit for goodwill impairment testing.
F-16
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 3 – Goodwill and Other Intangible Assets
The Company performs its annual goodwill impairment test as of the first day of the fiscal fourth quarter. No impairment was identified as a result of the Company's
annual impairment tests for 2023, 2022, and 2021.
The changes in the carrying amount of goodwill by segment for the years ended December 31, 2023 and 2022 were as follows:
Balance at December 31, 2021
MaxPower acquisition
Exchange rate effects
Balance at December 31, 2022
Centerline acquisition
Purchase price allocation adjustment
Exchange rate effects
Balance at December 31, 2023
Other intangible assets are as follows:
Intangible assets subject to amortization:
Patents and acquired technology
Capitalized software
Customer relationships
Tradenames
Other
Accumulated amortization:
Patents and acquired technology
Capitalized software
Customer relationships
Tradenames
Other
Net intangible assets subject to amortization
MOSFETs
Optoelectronic
Components
Resistors
Inductors
Total
$
$
$
-
36,885
-
36,885
-
(2,639)
-
34,246
$
$
$
96,849
-
-
96,849
-
-
-
96,849
$
$
$
$
42,605
-
(722)
41,883
2,213
-
410
44,506
$
$
25,815
-
-
25,815
-
-
-
25,815
$
$
$
165,269
36,885
(722)
201,432
2,213
(2,639)
410
201,416
December 31,
2023
December 31,
2022
$
$
26,053
62,360
83,895
22,300
400
195,008
(14,931)
(54,203)
(38,664)
(14,610)
(267)
(122,675)
72,333
$
$
26,988
58,735
82,816
22,933
400
191,872
(14,743)
(53,348)
(33,021)
(12,731)
(133)
(113,976)
77,896
Amortization expense (excluding capitalized software) was $9,916, $8,127, and $7,790, for the years ended December 31, 2023, 2022, and 2021, respectively.
Estimated annual amortization expense of intangible assets on the balance sheet at December 31, 2023 for each of the next five years is as follows:
2024
2025
2026
2027
2028
$
9,832
9,372
8,555
6,734
5,975
F-17
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 4 – Leases
The net right of use assets and lease liabilities recognized on the consolidated balance sheets for the Company's operating leases as of December 31, 2023 and
2022 are presented below:
Right of use assets
Operating Leases
Buildings and improvements
Machinery and equipment
Total
Current lease liabilities
Operating Leases
Buildings and improvements
Machinery and equipment
Total
Long-term lease liabilities
Operating Leases
Buildings and improvements
Machinery and equipment
Total
Total lease liabilities
December 31,
2023
December 31,
2022
$
$
$
$
$
$
$
121,578 $
5,251
126,829 $
126,933
4,260
131,193
23,647 $
2,838
26,485 $
22,926
2,393
25,319
100,489 $
2,341
102,830 $
129,315 $
106,693
1,800
108,493
133,812
Lease expense is classified in the statements of operations based on asset use. Total lease cost recognized on the consolidated statements of operations is as
follows:
Lease expense
Operating lease expense
Short-term lease expense
Variable lease expense
Total lease expense
Years ended December 31,
2022
2023
2021
$
$
27,909 $
988
566
29,463 $
25,606 $
971
365
26,942 $
24,853
2,031
359
27,243
The Company paid $28,164, $24,074, and $23,899 for its operating leases during the years ended December 31, 2023, 2022, and 2021, respectively, which are
included in operating cash flows on the consolidated statements of cash flows. The weighted-average remaining lease term for the Company's operating leases is
9.4 years and the weighted-average discount rate is 6.3% as of December 31, 2023.
The undiscounted future lease payments for the Company's operating lease liabilities are as follows:
2024
2025
2026
2027
2028
Thereafter
$
27,474
24,235
19,692
17,802
15,154
68,809
The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the
noncancellable term. The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities.
F-18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes
Changes in Tax Laws and Regulations
Israel
Effective November 15, 2021, Israel enacted changes in its tax laws. As a direct result of this change in tax law, the Company made the determination during the
fourth fiscal quarter of 2021 that substantially all unremitted foreign earnings in Israel were no longer indefinitely reinvested. The Company recorded additional tax
expense of $53,316 during the fourth fiscal quarter of 2021 to accrue the claw-back tax on applicable earnings and withholding taxes necessary to distribute these
approximately $385,000 of accumulated earnings to the United States. The Company repatriated $81,243 to the United States in 2022 pursuant to this
repatriation program. The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25,201 due to the repatriation.
United States
On December 22, 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted in the United States. Under previous law, companies could indefinitely defer U.S.
income taxation on unremitted foreign earnings. The TCJA imposed a one-time transition tax on deferred foreign earnings, payable in defined increments over eight
years. Installments of $27,670 were paid in 2023 and $14,757 were paid in each of 2022, 2021, 2020, 2019, and 2018.
The Company expects future installment payments as follows:
2024
2025
$
37,622
47,027
The U.S. Internal Revenue Service continues to issue regulations to address the provisions of the TCJA. During 2021, the Company amended tax returns for 2018
and 2019 and recognized tax benefits of $8,276 as a result of changes in tax regulations, by making an election regarding Global Intangible Low-Taxed Income
(“GILTI”). The Company has elected to account for GILTI tax in the period in which it is incurred and, therefore, does not provide any deferred taxes in the
consolidated financial statements at December 31, 2023, 2022, or 2021.
Change in Indefinite Reversal Assertion
The Company made the determination during the fourth fiscal quarter of 2022 that substantially all unremitted earnings in Germany are no longer indefinitely
reinvested. Additional tax expense was recorded during the fourth fiscal quarter of 2022 to accrue the $59,642 of withholding taxes necessary to distribute these
approximately $360,000 of accumulated earnings to the United States.
These changes in this indefinite reinvestment assertion provide greater access to the Company's worldwide cash balances to fund its growth plan and its
Stockholder Return Policy. While the change in assertion provides access to these balances, these amounts will be repatriated only as needed. The withholding
taxes associated with any distribution to the United States is payable upon distribution. During the fourth fiscal quarter of 2023, the Company repatriated
$325,000 of accumulated earnings to the United States and paid withholding taxes, in Germany and Israel, of $63,600.
At December 31, 2023, approximately $218,000 of German earnings and approximately $380,000 of Israeli earnings are deemed not indefinitely reinvested. The
aggregate tax liability recorded for unremitted earnings at December 31, 2023 is approximately $86,000, which includes amounts accrued subsequent to the
changes in indefinite reinvestment determinations described above.
There are amounts of unremitted foreign earnings in countries other than Israel and Germany, which continue to be reinvested indefinitely, and the Company has
made no provision for incremental foreign income taxes and withholding taxes payable to foreign jurisdictions related to these amounts. Determination of the
amount of the unrecognized deferred foreign tax liability for these amounts is not practicable because of the complexities associated with its hypothetical calculation.
F-19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes (continued)
Income before taxes consists of the following components:
Domestic
Foreign
Significant components of income taxes are as follows:
Current:
Federal
State and local
Foreign
Deferred:
Federal
State and local
Foreign
Total income tax expense
Years ended December 31,
2022
2023
2021
$
$
67,938
399,464
467,402
$
$
132,426
461,079
593,505
$
$
62,921
371,689
434,610
Years ended December 31,
2022
2023
2021
$
$
$
14,594
1,769
152,343
168,706
(4,871)
(3,651)
(18,295)
(26,817)
141,889
$
$
24,423
3,313
121,810
149,546
(40,136)
532
53,080
13,476
163,022
$
2,336
466
82,258
85,060
554
383
49,676
50,613
135,673
F-20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes (continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
Deferred tax assets:
Pension and other retiree obligations
Inventories
Net operating loss carryforwards
Tax credit carryforwards
Research and development costs
Original issue discount interest
Other accruals and reserves
Total gross deferred tax assets
Less valuation allowance
Deferred tax liabilities:
Property and equipment
Tax deductible goodwill
Earnings not indefinitely reinvested
Other - net
Total gross deferred tax liabilities
Net deferred tax assets (liabilities)
$
December 31,
2023
2022
$
29,400
23,836
81,497
54,363
17,829
20,039
25,179
252,143
(99,663)
152,480
(9,429)
(7,040)
(88,004)
(6,389)
(110,862)
29,327
21,040
82,498
53,145
7,704
-
29,930
223,644
(101,169)
122,475
(8,307)
(6,144)
(113,661)
(6,879)
(134,991)
$
41,618
$
(12,516)
The Company makes significant judgments regarding the realizability of its deferred tax assets (principally net operating losses and tax credits). The carrying value
of deferred tax assets is based on the Company’s assessment that it is more likely than not that the Company will realize these assets after consideration of all
available positive and negative evidence.
A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows:
Years ended December 31,
2022
2023
2021
Tax at statutory rate
State income taxes, net of U.S. federal tax benefit
Effect of foreign operations
Tax on earnings not indefinitely reinvested
Unrecognized tax benefits
Change in valuation allowance on deferred tax assets
Foreign income taxable in the U.S.
Foreign tax credit
U.S. Base Erosion Anti-Abuse Tax
Change in U.S. tax regulations
Other
Total income tax expense
$
$
$
98,154
(1,487)
9,260
37,061
1,999
(1,770)
11,829
(29,997)
16,837
-
3
141,889
$
$
124,636
3,038
13,422
71,141
(4,699)
(58,696)
14,925
(20,408)
20,918
-
(1,255)
163,022
$
91,268
671
5,521
54,648
1,318
(14,921)
9,532
(9,477)
9,134
(8,276)
(3,745)
135,673
F-21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes (continued)
Vishay operates in a global environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a
composite rate reflecting our earnings and the applicable tax rates in the various locations where we operate. Part of Vishay's historical strategy has been to
achieve cost savings through the transfer and expansion of manufacturing operations to countries where it can take advantage of lower labor costs and available tax
and other government-sponsored incentives. With the reduction in the U.S. statutory rate to 21% beginning January 1, 2018, Vishay expects that its effective tax
rate will be higher than the U.S. statutory rate, excluding unusual transactions. Historically, the effective tax rates were generally less than the U.S. statutory rate of
35% primarily because of earnings in foreign jurisdictions.
Income tax expense for the years ended December 31, 2022 and 2021 includes certain discrete tax items for changes in uncertain tax positions, valuation
allowances, tax rates, and other related items. These items total $20,032, and $39,326 in 2022 and 2021, respectively. There were no unusual tax items for the
year ended December 31, 2023.
For the year ended December 31, 2022, the discrete items include tax expense of $59,642 due to the Company's change in its assertion that earnings of its
subsidiaries in Germany are indefinitely reinvested, tax benefits of $5,941 for changes in uncertain tax positions following the resolution of a tax audit and a $33,669
tax benefit recognized upon the release of a valuation allowance.
For the year ended December 31, 2021, the discrete items include $53,316 of tax expense recognized to accrue the claw-back and withholding taxes to repatriate
unremitted foreign earnings from Israel, a $5,714 tax benefit recognized upon the release of a valuation allowance and $8,276 of tax benefits recognized due to
changes in tax regulations.
At December 31, 2023, the Company had the following significant net operating loss carryforwards for tax purposes:
Expires
Belgium
Israel
Japan
Netherlands
The Republic of China (Taiwan)
California
Pennsylvania
Arizona
At December 31, 2023, the Company had the following significant tax credit carryforwards available:
U.S. Foreign Tax Credit
California Research Credit
$
154,735 No expiration
5,364 No expiration
4,704
10,324 No expiration
11,728
2025- 2033
2026 - 2028
16,517
549,914
15,516
2028 - 2037
2024 - 2043
2032 - 2040
Expires
$
32,468 2028 - 2030
20,983 No expiration
F-22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 5 – Income Taxes (continued)
Net income taxes paid were $224,232, $134,199, and $79,106 for the years ended December 31, 2023, 2022, and 2021, respectively. Net income taxes paid
for the years ended December 31, 2023 and 2022 include withholding taxes for repatriation activity. Net income taxes paid for the years ended December 31,
2023, 2022, and 2021 also includes $27,670, $14,757, and $14,757, respectively, for the TCJA transition tax.
The following table summarizes changes in the liabilities associated with unrecognized tax benefits:
Balance at beginning of year
Addition based on tax positions related to the current year
Addition based on tax positions related to prior years
Currency translation adjustments
Reduction based on tax positions related to prior years
Reduction for settlements
Reduction for lapses of statute of limitation
Balance at end of year
Years ended December 31,
2022
2023
2021
$
$
$
18,429
1,210
5,455
230
-
(10,000)
(2,467)
$
12,857
$
26,719
-
3,197
(366)
-
(9,420)
(1,701)
$
18,429
40,652
141
1,037
(523)
(13,154)
(982)
(452)
26,719
All of the unrecognized tax benefits of $12,857 and $18,429, as of December 31, 2023 and 2022, respectively, would reduce the effective tax rate if recognized.
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2023 and 2022, the Company had
accrued interest and penalties related to the unrecognized tax benefits of $1,947 and $2,587, respectively. During the years ended December 31, 2023, 2022, and
2021, the Company recognized $821, $376, and $591, respectively, in interest and penalties.
The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple states and foreign jurisdictions. During the years ended
December 31, 2023, 2022, and 2021, certain tax examinations were concluded and certain statutes of limitations lapsed. The tax provision for those years
includes adjustments related to the resolution of these matters, as reflected in the table above. During 2023, the Company settled an examination of its U.S. federal
income tax returns for the years ended December 31, 2017 through 2019. The federal income tax returns for subsequent years remain subject to examination.
The tax returns of significant non-U.S. subsidiaries currently under examination are located in the following jurisdictions: Israel (2021), Germany (2017 through
2021), India (2004 through 2021), and Philippines (2017 through 2022). The Company and its subsidiaries also file income tax returns in other taxing jurisdictions
in the U.S. and around the world, many of which are still open to examination.
The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of tax payments that result from such examinations. These
events could cause large fluctuations in the balance sheet classification of current and non-current unrecognized tax benefits. The Company believes that in the next
12 months it is reasonably possible that certain income tax examinations will conclude or the statutes of limitation on certain income tax periods open to examination
will expire, or both. Given the uncertainties described above, the Company can only determine an estimate of potential decreases in unrecognized tax benefits
ranging from $1,250 to $10,487.
F-23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
December 31,
2023
December 31,
2022
$
$
$
-
95,102
750,000
(26,914)
818,188
-
818,188
$
42,000
465,344
-
(6,407)
500,937
-
500,937
Note 6 – Long-Term Debt
Long-term debt consists of the following:
Credit Facility
Convertible senior notes, due 2025
Convertible senior notes, due 2030
Deferred financing costs
Less current portion
Credit Facility
The Company maintains a credit agreement with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent, and the lenders (the "Credit
Facility"). On May 8, 2023, the Company entered into an Amendment and Restatement Agreement, which provides an aggregate commitment of $750,000 of
revolving loans available until May 8, 2028, replacing an agreement that was scheduled to mature on June 5, 2024. The maturity date of the Credit Facility will
accelerate if within ninety-one days prior to the maturity of the Company's convertible senior notes due 2025, the outstanding principal amount of such notes
exceed a defined liquidity measure as set forth in the Credit Facility. The Credit Facility also provides for the ability of Vishay to request up to $300,000 of
incremental facilities, subject to the satisfaction of certain conditions, which could take the form of additional revolving commitments, incremental “term loan A” or
“term loan B” facilities, or incremental equivalent debt.
U.S. Dollar borrowings under the Credit Facility bear interest at Secured Overnight Financing Rate ("SOFR") plus a credit spread and an interest margin. The
Credit Facility also allows for borrowings in euro, British sterling, and Japanese yen, subject to a $250,000 limit. Borrowings in foreign currency bear interest at a
local reference rate plus an interest margin. The applicable interest margin is based on the Company's total leverage ratio. Based on the Company's current total
leverage ratio, borrowings bear interest at SOFR plus 1.60%, including the applicable credit spread. The Company also pays a commitment fee, also based on its
total leverage ratio, on undrawn amounts. The undrawn commitment fee, based on the Company's total current leverage ratio, is 0.25% per annum.
The Credit Facility requires the maintenance of financial covenant ratios. For compliance purposes, pursuant to the Credit Facility, the leverage ratio is computed
on a net basis, reducing the measure of outstanding debt by up to $250,000 of unrestricted cash. The Company must maintain a net leverage ratio of at least 3.25
to 1.00.
Borrowings under the Credit Facility are secured by a lien on substantially all assets, including accounts receivable, inventory, machinery and equipment, and
general intangibles (but excluding real estate, intellectual property registered or licensed solely for use in, or arising solely under the laws of, any country other than
the United States, assets located solely outside of the United States and deposit and securities accounts), of the Company and certain significant subsidiaries
located in the United States, and pledges of stock in certain significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries.
The Credit Facility limits or restricts the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets,
making investments and acquisitions (assuming the Company’s pro forma net leverage ratio is greater than 2.75 to 1.00), making asset sales, and paying cash
dividends and making other restricted payments (assuming the Company's pro forma net leverage ratio is greater than 2.50 to 1.00), and requires the Company to
comply with other covenants.
The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other
material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings,
the insolvency of the Company or certain of its significant subsidiaries, and the rendering of a judgment in excess of $50,000 against the Company or its
subsidiaries. Upon the occurrence of an event of default under the Credit Facility, the Company's obligations under the credit facility may be accelerated and the
lending commitments under the credit facility may be terminated.
At December 31, 2023 and 2022, there was $748,578 and $707,061, respectively, available under the Credit Facility. Letters of credit totaling $1,422 and $939
were outstanding at December 31, 2023 and 2022, respectively.
F-24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 6 – Long-Term Debt (continued)
Convertible Debt Instruments
The following table summarizes some key facts and terms regarding the outstanding convertible senior notes as of December 31, 2023:
Due 2025
Issuance date
Maturity date
Principal amount
Cash coupon rate (per annum)
Conversion rate effective December 12, 2023 (per $1 principal amount)
Effective conversion price effective December 12, 2023 (per share)
130% of the conversion price (per share)
Convertible Senior Notes due 2030
$
$
$
June 12, 2018
June 15, 2025
95,102
2.25%
32.1268
31.13
40.47
Due 2030
September 12, 2023
September 15, 2030
750,000
$
2.25%
33.1609
30.16
39.21
$
$
In September 2023, the Company issued $750,000 aggregate principal amount of 2.25% convertible senior notes due 2030 (the “2030 Notes”) to qualified
institutional buyers pursuant to an exemption from registration provided by Rule 144A under the Securities Act. The Company used the net proceeds from this
offering to repurchase $370,242 principal amount of its outstanding 2.25% convertible senior notes due 2025 (the “2025 Notes”) (as further described below), to
reduce the outstanding balance of its Credit Facility, to enter into capped call transactions (as further described below), and for other general corporate purposes.
The 2030 Notes bear interest at a rate of 2.25% per year payable semi-annually in arrears on March 15 and September 15 of each year, beginning March 15,
2024. The 2030 Notes mature on September 15, 2030, unless earlier repurchased or converted.
The 2030 Notes are convertible into shares of Vishay common stock at an initial conversion rate of 33.1609 shares of common stock per $1 principal amount of
the notes, subject to adjustment. This initial conversion price represents a premium of 20% to the closing price of Vishay's common stock on September 7, 2023,
which was $25.13 per share. This represents an initial effective conversion price of approximately $30.16 per share. The conversion rate of the 2030 Notes is not
adjusted for quarterly cash dividends equal to or less than $0.10 per share of common stock. Pursuant to the indenture governing the 2030 Notes, the Company is
required to satisfy its conversion obligations by paying cash equal to the principal amount of notes and settle any additional value in cash and/or shares at its
discretion. Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenture governing the notes.
The Company may not redeem the 2030 Notes prior to September 20, 2027. The Company may redeem for cash all or part of the 2030 Notes, at its option, on
or after September 20, 2027, if the sale price of Vishay’s common stock has been at least 130% of the conversion price for a specified period at a redemption
price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. If the Company elects to redeem fewer than all of the
outstanding 2030 Notes, at least $100,000 aggregate principal amount of 2030 Notes must be outstanding and not subject to redemption.
Prior to March 15, 2030, the holders of the 2030 Notes may convert their notes only under the following conditions: (1) the sale price of Vishay common stock
reaches 130% of the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on December 31, 2023;
(2) the trading price of the notes falls below 98% of the product of the last reported sale price of Vishay’s common stock and the conversion rate for a specified
period; (3) the Company calls any or all of the 2030 Notes for redemption; or (4) upon the occurrence of specified corporate transactions.
Capped Call Transactions
In September 2023, in connection with the pricing and initial purchasers’ exercise in full of their option to purchase additional 2030 Notes, the Company entered
into separate base and additional privately negotiated capped call transactions with an affiliate of an initial purchaser and certain other financial institutions. The
capped call will initially cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie
the 2030 Notes. The Company used $94,200 of the net proceeds from the 2030 Notes to pay the cost of the capped call transactions. The cap price of the
capped call will initially be $43.98 per share, which represents a premium of approximately 75% over the last reported sale price of the Company’s common stock
on September 7, 2023, and is subject to certain adjustments under the terms of the capped call.
The capped call transactions are separate transactions entered into by the Company with each of the capped call counterparties, are not part of the terms of the
2030 Notes, and do not affect any holder’s rights under the 2030 Notes. Holders of the 2030 Notes do not have any rights with respect to the capped call. The
capped call is classified within stockholders’ equity on the consolidated balance sheet.
F-25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 6 – Long-Term Debt (continued)
Convertible Senior Notes due 2025
The Company used $386,745 of the net proceeds from the offering of the 2030 Notes to repurchase $370,242 principal amount of its outstanding 2025 Notes.
As a result, the Company recognized a loss on early extinguishment of the 2025 Notes of $18,874, including the write-off of a portion of unamortized debt issuance
costs.
Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) the sale price
of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale
price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible
senior notes due 2025 are not currently convertible.
Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted
notes and settle any additional amounts due in common stock.
The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior notes
due 2025 effective as of the ex-dividend date of each cash dividend. The conversion rate and effective conversion price for the convertible senior notes due 2025
is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock.
Other Borrowings Information
The Credit Facility, of which no amount was drawn as of December 31, 2023, expires in 2028. The convertible senior notes mature in 2025 and 2030,
respectively.
At December 31, 2023 and 2022, the Company had committed and uncommitted credit lines with various foreign banks aggregating approximately $34,000 and
$1,000, respectively, with substantially no amounts borrowed.
Interest paid was $17,242, $13,739, and $14,177 for the years ended December 31, 2023, 2022, and 2021, respectively. Deferred financing costs are
recognized as non-cash interest expense. Non-cash interest expense was $3,735, $3,272, and $3,272 for the years ended December 31, 2023, 2022, and 2021,
respectively.
See Note 18 for further discussion on the fair value of the Company’s long-term debt.
F-26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 7 – Stockholders’ Equity
The Company’s Class B common stock carries 10 votes per share while the common stock carries 1 vote per share. Class B shares are transferable only to certain
permitted transferees while the common stock is freely transferable. Class B shares are convertible on a one-for-one basis at any time into shares of common
stock. Transfers of Class B shares other than to permitted transferees result in the automatic conversion of the Class B shares into common stock.
The Board of Directors may only declare dividends or other distributions with respect to the common stock or the Class B common stock if it grants such
dividends or distributions in the same amount per share with respect to the other class of stock. Stock dividends or distributions on any class of stock are payable
only in shares of stock of that class. Shares of either common stock or Class B common stock cannot be split, divided, or combined unless the other is also split,
divided, or combined equally. Cash dividends were paid quarterly in 2023 and 2022.
The Credit Facility also allows an unlimited amount of defined "Restricted Payments," which include cash dividends and share repurchases, provided the
Company's pro forma net leverage ratio is equal to or less than 2.50 to 1.00. If the Company's pro forma net leverage ratio is greater than 2.50 to 1.00, the Credit
Facility allows such payments up to $100,000 per annum (subject to a cap of $300,000 for the term of the facility, with up to $25,000 of any unused amount of the
$100,000 per annum base available for use in the next succeeding calendar year).
At December 31, 2023, the Company had reserved shares of common stock for future issuance as follows:
Restricted stock units outstanding
Phantom stock units outstanding
2023 Long-Term Incentive Plan - available to grant
Convertible senior notes, due 2025
Convertible senior notes, due 2030
Conversion of Class B common stock
Total
1,717,000
120,000
5,250,847
3,055,323
24,870,675
12,097,148
47,110,993
In 2022, the Company's Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind
the policy. The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return
such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases.
The following table summarizes activity pursuant to this policy:
Dividends paid to stockholders
Stock repurchases
Total
Years ended December 31,
2023
2022
$
$
55,626
78,684
134,310
$
$
57,187
82,972
140,159
The repurchased shares are being held as treasury stock. The number of shares of common stock being held as treasury stock was 7,535,881 and 4,240,573 as
of December 31, 2023 and 2022, respectively.
F-27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 8 – Details of Expenses
The caption “Other” on the accompanying consolidated statements of operations consists of the following:
Years ended December 31,
2022
2023
2021
Foreign exchange gain (loss)
Interest income
Other components of periodic pension expense
Investment income (expense)
Other
Impact of the COVID-19 Pandemic
$
$
$
677
31,353
(8,730)
1,347
616
25,263
$
$
5,690
7,560
(11,090)
(6,812)
(200)
(4,852) $
(2,692)
1,269
(13,206)
(1,036)
11
(15,654)
The Company's operations were impacted by the "COVID-19" pandemic, particularly in 2020 and again in 2022 when operations in the People's Republic of
China were impacted by government-mandated shut-downs. The Company incurred incremental costs separable from normal operations that are directly related
to the pandemic containment efforts, primarily wages paid to manufacturing employees during government-mandated shut-downs, additional wages and hardship
allowances for working during lockdown periods, additional costs of cleaning and disinfecting facilities, costs of additional safety equipment for employees, and
temporary housing for employees due to travel restrictions, which were partially offset by government subsidies. Since 2021, certain costs directly attributable to
the pandemic, such as additional costs of cleaning and disinfecting facility and costs of additional safety equipment for employees, are no longer incremental and are
considered normal operating costs. The net impact of the costs and subsidies are reported as "Cost of products sold" of $6,661 and "Selling, general, and
administrative expenses" of $546 based on employee function on the consolidated statement of operations for the year ended December 31, 2022.
F-28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 9 – Other Accrued Expenses
Other accrued expenses consist of the following:
Sales returns and allowances
Goods received, not yet invoiced
Accrued VAT taxes payable
Other
Sales returns and allowances accrual activity is shown below:
Beginning balance
Sales returns and allowances
Credits issued
Foreign currency
Ending balance
$
$
December 31,
2023
2022
$
$
47,760
44,657
56,218
90,715
239,350
$
$
46,979
60,201
55,010
99,416
261,606
Years Ended December 31,
2022
2023
2021
$
46,979
101,696
(101,324)
409
47,760
$
$
39,759
102,640
(94,682)
(738)
46,979
$
39,629
89,832
(88,708)
(994)
39,759
F-29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 10 – Accumulated Other Comprehensive Income (Loss)
The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows:
Balance at January 1, 2021
Other comprehensive income before reclassifications
Tax effect
Other comprehensive income before reclassifications, net of tax
Amounts reclassified out of AOCI
Tax effect
Amounts reclassified out of AOCI, net of tax
Net comprehensive income (loss)
Balance at December 31, 2021
Other comprehensive income before reclassifications
Tax effect
Other comprehensive income before reclassifications, net of tax
Amounts reclassified out of AOCI
Tax effect
Amounts reclassified out of AOCI, net of tax
Net comprehensive income (loss)
Balance at December 31, 2022
Other comprehensive income before reclassifications
Tax effect
Other comprehensive income before reclassifications, net of tax
Amounts reclassified out of AOCI
Tax effect
Amounts reclassified out of AOCI, net of tax
Net comprehensive income (loss)
Balance at December 31, 2023
Pension and
other post-
retirement
actuarial
items
Currency
translation
adjustment
Total
$
$
$
$
$
$
$
(77,075) $
12,592
(2,509)
10,083
10,677
(2,593)
8,084
$
18,167
(58,908) $
60,949
(15,783)
45,166
8,260
(2,116)
6,144
$
51,310
(7,598) $
(10,338)
2,462
(7,876)
1,181
(306)
875
(7,001) $
(14,599) $
90,634
$
(51,978) $
-
$
(51,978) $
$
-
$
-
-
$
(51,978) $
38,656
$
(41,885) $
$
-
(41,885) $
$
-
$
-
$
-
(41,885) $
(3,229) $
$
28,165
$
-
$
28,165
$
-
$
-
$
-
$
28,165
$
24,936
13,559
(39,386)
(2,509)
(41,895)
10,677
(2,593)
8,084
(33,811)
(20,252)
19,064
(15,783)
3,281
8,260
(2,116)
6,144
9,425
(10,827)
17,827
2,462
20,289
1,181
(306)
875
21,164
10,337
Other comprehensive income (loss) includes Vishay's proportionate share of other comprehensive income (loss) of nonconsolidated subsidiaries accounted for
under the equity method.
F-30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits
The Company maintains various retirement benefit plans. GAAP requires employers to recognize the funded status of a benefit plan, measured as the difference
between plan assets at fair value and the benefit obligation, in its balance sheet. The recognition of the funded status on the balance sheet requires employers to
recognize actuarial items (such as actuarial gains and losses, prior service costs, and transition obligations) as a component of other comprehensive income, net of
tax.
The following table summarizes amounts recorded on the accompanying consolidated balance sheets associated with these various retirement benefit plans:
Included in "Other assets":
Non-U.S. pension plans
Total included in other assets
Included in "Payroll and related expenses":
U.S. pension plans
Non-U.S. pension plans
U.S. other postretirement plans
Non-U.S. other postretirement plans
Total included in payroll and related expenses
Accrued pension and other postretirement costs:
U.S. pension plans
Non-U.S. pension plans
U.S. other postretirement plans
Non-U.S. other postretirement plans
Other retirement obligations
Total accrued pension and other postretirement costs
Accumulated other comprehensive loss:
U.S. pension plans
Non-U.S. pension plans
U.S. other postretirement plans
Non-U.S. other postretirement plans
Total accumulated other comprehensive loss*
* - Amounts included in accumulated other comprehensive loss are presented in this table pre-tax
Defined Benefit Pension Plans
U.S. Pension Plans
December 31,
2023
2022
3,929
3,929
$
$
4,715
4,715
(1,474) $
(7,149)
(510)
(390)
(9,523) $
(29,217) $
(144,276)
(3,750)
(7,173)
(11,087)
(195,503) $
(522) $
24,891
(1,527)
1,488
24,330
$
(6,378)
(6,827)
(497)
(666)
(14,368)
(30,843)
(135,809)
(3,831)
(6,049)
(10,560)
(187,092)
69
16,392
(2,031)
743
15,173
$
$
$
$
$
$
$
$
The Company maintained several defined benefit pension plans which covered most full-time U.S. employees. These included pension plans which are “qualified”
under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal Revenue Code, and “non-qualified” pension plans which provide defined
benefits primarily to U.S. employees whose benefits under the qualified pension plan would be limited by ERISA and the Internal Revenue Code. The Company’s
principal qualified U.S. pension plan (the Vishay Retirement Plan) was frozen effective January 1, 2009 and terminated in 2016.
The Company’s principal non-qualified U.S. pension plan (the Vishay Non-qualified Retirement Plan) was a contributory pension plan designed to provide similar
defined benefits to covered U.S. employees whose benefits under the Vishay Retirement Plan were limited by the Internal Revenue Code. The Vishay Non-
qualified Retirement Plan was similar in construction to the Vishay Retirement Plan, except that the plan is not qualified under the Internal Revenue Code.
The Vishay Non-qualified Retirement Plan, like all non-qualified plans, is considered to be unfunded. The Company maintains a non-qualified trust, referred to as a
“rabbi” trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of
employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the non-qualified pension plan were $21,095 and $20,615
at December 31, 2023 and 2022, respectively.
F-31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
In 2008, the Company adopted amendments to the Vishay Non-Qualified Retirement Plan such that effective January 1, 2009, the plan was frozen. Pursuant to
these amendments, no new employees may participate in the plans, no further participant contributions were required or permitted, and no further benefits shall
accrue after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid to employees upon or following retirement, and the Company will
likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation.
The Company also maintains other pension plans which provide supplemental defined benefits primarily to former U.S. employees whose benefits under qualified
pension plans were limited by the Internal Revenue Code. These non-qualified plans are all non-contributory plans, and are considered to be unfunded.
In 2004, the Company entered into an employment agreement with Dr. Felix Zandman, its Executive Chairman and then-Chief Executive Officer. Pursuant to this
agreement, the Company is providing an annual retirement benefit of approximately $614 to his surviving spouse. The Company maintains a non-qualified trust,
referred to as a “rabbi” trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the
property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to this non-qualified pension plan were $445 and
$1,023 at December 31, 2023 and 2022, respectively.
Non-U.S. Pension Plans
The Company provides pension and similar benefits to employees of certain non-U.S. subsidiaries consistent with local practices. Pension benefits earned are
generally based on years of service and compensation during active employment.
The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to U.S. and non-U.S. pension plans:
December 31, 2023
U.S.
Plans
Non-U.S.
Plans
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
Change in benefit obligation:
Benefit obligation at beginning of year
Service cost
Interest cost
Plan amendments
Actuarial (gains) losses
Benefits paid
Curtailments and settlements
Currency translation
Benefit obligation at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Company contributions
Benefits paid
Currency translation
Fair value of plan assets at end of year
Funded status at end of year
$
$
$
$
$
$
37,221
-
1,997
-
(272)
(8,255)
-
-
30,691
$
$
-
-
8,255
(8,255)
-
-
$
$
203,541
3,063
7,346
(15)
8,835
(17,160)
(27)
5,200
210,783
$
$
65,620
1,976
12,161
(17,160)
690
63,287
$
$
45,613
-
1,122
-
(7,668)
(1,846)
-
-
37,221
$
$
-
-
1,846
(1,846)
-
-
$
278,173
4,199
3,200
79
(45,102)
(16,777)
-
(20,231)
203,541
75,920
790
13,212
(16,777)
(7,525)
65,620
(30,691) $
(147,496) $
(37,221) $
(137,921)
F-32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
The plan assets are stated at fair value. See Note 18 for further discussion of the valuation of the plan assets.
Amounts recognized in the accompanying consolidated balance sheets consist of the following:
Other assets
Accrued benefit liability - current
Accrued benefit liability - non-current
Accumulated other comprehensive loss
Actuarial items consist of the following:
Unrecognized net actuarial (gain) loss
Unamortized prior service cost
December 31, 2023
U.S.
Plans
Non-U.S.
Plans
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
-
$
(1,474)
(29,217)
(522)
(31,213) $
$
3,929
(7,149)
(144,276)
24,891
(122,605) $
$
-
(6,378)
(30,843)
69
(37,152) $
4,715
(6,827)
(135,809)
16,392
(121,529)
December 31, 2023
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
(588) $
66
(522) $
24,094
797
24,891
$
$
(140) $
209
69
$
15,628
764
16,392
$
$
$
$
The following table sets forth additional information regarding the projected and accumulated benefit obligations:
December 31, 2023
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
Accumulated benefit obligation, all plans
$
30,691 $
194,361
$
37,221 $
176,056
Plans for which the accumulated benefit obligation exceeds plan assets:
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
The following table sets forth the components of net periodic pension cost:
$
30,691 $
30,691
-
$
146,898
144,213
3,032
37,221 $
37,221
-
181,207
159,433
38,854
2023
Years ended December 31,
2022
2021
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial losses
Amortization of prior service cost
Curtailment and settlement losses
Net periodic pension cost
$
$
-
1,997
-
175
144
-
2,316
$
$
$
3,063
7,346
(2,270)
345
195
546
9,225
$
-
1,122
-
1,523
144
-
2,789
$
$
$
4,199
3,200
(1,725)
4,760
216
1,190
11,840
$
-
1,016
-
2,032
144
-
3,192
$
$
4,693
2,968
(1,660)
7,444
189
632
14,266
F-33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
See Note 10 for the pretax, tax effect and after tax amounts included in other comprehensive income during the years ended December 31, 2023, 2022, and
2021. The estimated actuarial items for the defined benefit pensions plans that will be amortized from accumulated other comprehensive loss into net periodic
pension cost during 2024 are not material.
The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years:
Discount rate
Rate of compensation increase
2023
2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
5.25%
0.00%
3.36%
3.12%
5.50%
0.00%
3.57%
2.60%
The following weighted average assumptions were used to determine the net periodic pension costs:
Discount rate
Rate of compensation increase
Expected return on plan assets
Years ended December 31,
2023
2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
5.50%
0.00%
0.00%
3.57%
2.60%
4.11%
2.50%
0.00%
0.00%
1.19%
2.07%
2.96%
The plans’ expected return on assets is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment
portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, advice from
pension consultants and investment advisors, and current economic and capital market conditions.
The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higher return, more volatile equity
securities, and lower return, less volatile fixed income securities and is adjusted for the expected duration of the obligation and the funded status of the plan.
Investment allocations are made across a range of securities, maturities and credit quality. The Company’s non-U.S. defined benefit plan investments are based on
local laws and customs. Most plans invest in cash and local government fixed income securities, although plans in certain countries have investments in equity
securities. The plans do not invest in securities of Vishay or its subsidiaries. Negative investment returns could ultimately affect the funded status of the plans,
requiring additional cash contributions. See Note 18 for further information on the fair value of the plan assets by asset category.
Estimated future benefit payments are as follows:
2024
2025
2026
2027
2028
2029-2033
U.S.
Plans
Non-U.S.
Plans
$
3,347 $
3,301
1,941
8,306
3,198
9,415
14,897
15,450
17,775
14,830
14,744
74,939
The Company’s anticipated 2024 contributions for defined benefit pension plans will approximate the expected benefit payments disclosed above.
F-34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
Other Postretirement Benefits
In the U.S., the Company maintains unfunded non-pension postretirement plans, including medical benefits for certain executives and their surviving spouses, which
are funded as costs are incurred. The Company also maintains two unfunded non-pension postretirement plans at two European subsidiaries.
The following table sets forth a reconciliation of the benefit obligation, plan assets, and accrued benefit cost related to U.S. and non-U.S. non-pension defined
benefit postretirement plans:
December 31, 2023
U.S.
Plans
Non-U.S.
Plans
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
Change in benefit obligation:
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gains) losses
Benefits paid
Currency translation
Benefit obligation at end of year
Fair value of plan assets at end of year
Funded status at end of year
$
$
$
$
Amounts recognized in the accompanying consolidated balance sheets consist of the following:
$
4,328
21
225
183
(497)
-
4,260
$
$
6,715
221
251
801
(681)
256
7,563
$
$
7,611
39
178
(2,525)
(975)
-
4,328
$
7,782
237
55
(749)
(147)
(463)
6,715
-
$
-
$
-
$
-
(4,260) $
(7,563) $
(4,328) $
(6,715)
Accrued benefit liability - current
Accrued benefit liability - non-current
Accumulated other comprehensive (income) loss
December 31, 2023
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
$
$
(510) $
(3,750)
(1,527)
(5,787) $
(390) $
(7,173)
1,488
(6,075) $
(497) $
(3,831)
(2,031)
(6,359) $
(666)
(6,049)
743
(5,972)
F-35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
Actuarial items consist of the following:
Unrecognized net actuarial loss (gain)
The following table sets forth the components of net periodic benefit cost:
December 31, 2023
U.S.
Plans
Non-U.S.
Plans
December 31, 2022
U.S.
Plans
Non-U.S.
Plans
$
$
(1,527) $
(1,527) $
1,488
1,488
$
$
(2,031) $
(2,031) $
743
743
2023
U.S.
Plans
Non-U.S.
Plans
Years ended December 31,
2022
U.S.
Plans
Non-U.S.
Plans
2021
U.S.
Plans
Non-U.S.
Plans
Service cost
Interest cost
Amortization of actuarial (gains) losses
Curtailment and settlement losses
Net periodic benefit cost (benefit)
$
$
$
21
225
(321)
-
(75) $
221
251
8
89
569
$
$
39
178
342
-
559
$
$
237
55
85
-
377
$
$
102
163
53
-
318
$
$
278
42
116
67
503
The estimated actuarial items for the other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit
cost during 2024 are not material.
The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years:
Discount rate
Rate of compensation increase
2023
2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
5.25%
0.00%
3.40%
4.00%
5.50%
0.00%
3.86%
4.19%
The following weighted average assumptions were used to determine the net periodic benefit costs:
Discount rate
Rate of compensation increase
Years ended December 31,
2023
2022
U.S.
Plans
Non-U.S.
Plans
U.S.
Plans
Non-U.S.
Plans
5.50%
0.00%
3.86%
4.19%
2.50%
0.00%
0.80%
2.88%
The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not
material.
F-36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 11 – Pensions and Other Postretirement Benefits (continued)
Estimated future benefit payments are as follows:
2024
2025
2026
2027
2028
2029-2033
U.S.
Plans
Non-U.S.
Plans
$
510 $
499
467
452
416
1,594
390
621
205
1,525
785
4,897
As the plans are unfunded, the Company’s anticipated contributions for 2024 are equal to its estimated benefits payments.
Other Retirement Obligations
The Company participates in various other defined contribution and government-mandated retirement plans based on local law or custom. The Company
periodically makes required contributions for certain of these plans, whereas other plans are unfunded retirement bonus plans which will be paid at the employee's
retirement date. At December 31, 2023 and 2022, the accompanying consolidated balance sheets include $11,087 and $10,560, respectively, within accrued
pension and other postretirement costs related to these plans.
The Company’s U.S. employees are eligible to participate in a 401(k) savings plan, which provides for Company matching contributions. The Company’s
matching expense for the plans was $7,641, $7,083, and $6,557 for the years ended December 31, 2023, 2022, and 2021, respectively. No material amounts
are included in the accompanying consolidated balance sheets at December 31, 2023 and 2022 related to unfunded 401(k) contributions.
Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2023, 2022, and 2021, these employees could defer a
portion of their compensation until retirement, or elect shorter deferral periods. The Company maintains a liability within other noncurrent liabilities on its
consolidated balance sheets related to these deferrals. The Company maintains a non-qualified trust, referred to as a “rabbi” trust, to fund payments under this
plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other
noncurrent assets. Assets held in trust related to the deferred compensation plan at December 31, 2023 and 2022 were approximately $28,838 and $28,535,
respectively.
F-37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – Stock-Based Compensation
2023 Long-Term Incentive Plan
The Company implemented the Vishay Intertechnology, Inc. 2023 Long-Term Incentive Plan (the "2023 Plan") after receiving stockholder approval at its 2023
Annual Meeting of Stockholders on May 23, 2023. The 2023 Plan allows the Company to grant up to 6,000,000 shares (subject to certain adjustments described
in the 2023 Plan) of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards, phantom stock units, and other
cash-based awards to employees, directors, consultants, and other service providers of the Company and its affiliates. Such instruments are available for grant until
March 24, 2033. The Company has granted approximately 761,000 time-vested restricted stock units to employees pursuant to the 2023 Plan. At December 31,
2023, the Company has reserved 5,250,847 shares of common stock for future grants of equity awards pursuant to the 2023 Plan.
2007 Stock Incentive Program
Under the Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, certain executive officers and board members of the
Company were granted restricted stock units. No further awards will be granted pursuant to the 2007 Program. Pursuant to the terms of the 2023 Plan, any
shares of common stock that are subject to outstanding awards granted pursuant to the 2007 Program that subsequently cease to be subject to such awards as a
result of the termination, expiration, cancellation, or forfeiture of such awards and any shares of common stock withheld in settlement of tax withholding obligations
associated with outstanding awards granted pursuant to the 2007 Program may become available for issuance under the 2023 Plan. A total of 1,294,546 shares of
common stock were subject to awards granted pursuant to the 2007 Program as of May 23, 2023.
All RSUs granted pursuant to the 2007 Program and the 2023 Plan contain service vesting conditions. Certain RSUs also contain performance or market vesting
conditions. The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period that the expectation
changes.
The following table summarizes share-based compensation expense recognized:
Restricted stock units
Phantom stock units
Total
Years ended December 31,
2022
2023
2021
$
$
16,425
107
16,532
$
$
6,323
222
6,545
$
$
6,396
209
6,605
The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods at December 31, 2023 (amortization
periods in years):
Restricted stock units
Phantom stock units
Total
Weighted
Average
Remaining
Amortization
Periods
1.6
0.0
Unrecognized
Compensation
Cost
$
$
15,174
-
15,174
The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost for performance-based RSUs
presented in the table above to be recognized.
F-38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – Stock-Based Compensation (continued)
Restricted Stock Units
Each RSU entitles the recipient to receive a share of common stock when the RSU vests.
RSU activity is presented below (number of RSUs in thousands):
2023
Weighted
Average
Grant-date
Fair Value
Number of
RSUs
Years ended December 31,
2022
Number of
RSUs
Weighted
Average
Grant-date
Fair Value
2021
Weighted
Average
Grant-date
Fair Value
Number of
RSUs
Outstanding:
Beginning of year
Granted*
Vested**
Cancelled or forfeited
End of year
Expected to vest
19.73
24.34
18.86
24.83
23.03
$
894
1,180
(342)
(15)
1,717
$
1,702
20.08
19.13
20.04
20.50
19.73
$
877
336
(306)
(13)
$
894
894
18.90
22.07
18.79
-
20.08
$
793
319
(235)
-
877
$
877
* Employees in certain countries are granted equity-linked awards that will be settled in cash and are accounted for as liability awards. The liability awards are not material. The number
of RSUs granted excludes these awards.
** The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding requirements.
The number of performance-based RSUs that are scheduled to vest increases ratably based on the achievement of defined performance and market criteria
between the established target and maximum levels. RSUs with performance-based and market-based vesting criteria are expected to vest as follows (number of
RSUs in thousands):
Vesting Date
January 1, 2024***
January 1, 2025
January 1, 2026
Expected to
Vest
Not Expected
to Vest
Total
165
168
157
-
-
15
165
168
172
*** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2024 were achieved.
In the event of (i) any termination (other than for cause) after attaining retirement age (as defined in the respective executive's employment arrangement), the
executive's outstanding RSUs shall immediately vest and the outstanding performance-based RSUs shall vest on their normal vesting date to the extent applicable
performance criteria are realized; (ii) a change of control of Vishay in which the executive's RSUs and performance-based RSUs are not assumed or continued, all
of such executive’s outstanding RSUs and performance-based RSUs shall immediately vest; (iii) a change of control of Vishay in which the executive's RSUs and
performance-based RSUs are assumed or continued, upon termination without cause or good reason the executive's outstanding RSUs and performance-based
RSUs. In the event of voluntary termination by the executive prior to attaining retirement age or termination for cause, the executive’s outstanding RSUs and
performance-based RSUs will be forfeited.
F-39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 12 – Stock-Based Compensation (continued)
Phantom Stock Units
Each phantom stock unit entitles the recipient to receive a share of common stock at the individual's termination of employment or any other future date specified in
the applicable employment agreement. Phantom stock units participate in dividend distribution on the same basis as the Company's common stock and Class B
common stock. Dividend equivalents are issued in the form of additional units of phantom stock. The phantom stock units are fully vested at all times.
The following table summarizes the Company’s phantom stock units activity (number of phantom stock units in thousands):
2023
Years ended December 31,
2022
2021
Number of
Phantom
Stock Units
Grant-date
Fair Value per
Unit
Number of
Phantom
Stock Units
Grant-date
Fair Value per
Unit
Number of
Phantom
Stock Units
Grant-date
Fair Value per
Unit
Outstanding:
Beginning of year
Granted
Dividend equivalents issued
Redeemed for common stock*
End of year
* The number of phantom stock units redeemed for common stock includes shares that the Company withheld on behalf of employees to satisfy the statutory tax withholding
requirements.
226
5
2
(113)
120
212
10
4
-
226
198
10
4
-
212
22.20
20.89
21.48
$
$
$
F-40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 13 – Commitments and Contingencies
Environmental Matters
The Company is subject to various federal, state, local, and foreign laws and regulations governing environmental matters, including the use, discharge, and disposal
of hazardous materials. The Company’s manufacturing facilities are believed to be in substantial compliance with current laws and regulations. Complying with
current laws and regulations has not had a material adverse effect on the Company’s financial condition.
The Company has engaged environmental consultants and attorneys to assist management in evaluating potential liabilities related to environmental matters.
Management assesses the input from these consultants along with other information known to the Company in its effort to continually monitor these potential
liabilities. Management assesses its environmental exposure on a site-by-site basis, including those sites where the Company has been named as a “potentially
responsible party.” Such assessments include the Company’s share of remediation costs, information known to the Company concerning the size of the hazardous
waste sites, their years of operation, and the number of past users and their financial viability.
As of December 31, 2023, the Company has accrued environmental liabilities of $12,430, of which $2,936 is included in other accrued liabilities on the
accompanying consolidated balance sheet, and $9,494 is included in other noncurrent liabilities on the accompanying consolidated balance sheet.
While the ultimate outcome of these matters cannot be determined, management does not believe that the final disposition of these matters will have a material
adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. The Company’s present and past facilities have been in
operation for many years. These facilities have used substances and have generated and disposed of wastes which are or might be considered hazardous.
Therefore, it is possible that additional environmental issues may arise in the future, which the Company cannot now predict.
Litigation
The Company is a party to various claims and lawsuits arising in the normal course of business. The Company is of the opinion that these litigations or claims will
not have a material negative effect on its consolidated financial position, results of operations, or cash flows.
Long-Term Purchase Agreements
The Company maintains long-term purchase agreements with subcontractors, suppliers, and other business partners to ensure access to external capacity and
supply. The Company has minimum purchase commitments pursuant to certain of its long-term arrangements with its subcontractors and other suppliers and
business partners of $57,824 and $29,109 for the years 2024 through 2025, respectively. Certain minimum purchase commitments are based on an 18-month
rolling forecast and, accordingly, the 2025 minimum purchase commitments will likely increase. The Company has the option to purchase amounts in addition to
the minimum commitment and, accordingly, actual purchases may be different than the amounts disclosed above. The Company exceeded its minimum purchase
commitments in 2023.
Product Quality Claims
The Company is a party to various product quality claims in the normal course of business. See Note 1 for further information on the Company's warranty
obligations.
Executive Employment Agreements
The Company has employment agreements with certain of its senior executives. These employment agreements provide incremental compensation in the event of
termination. The Company does not provide any severance or other benefits specifically upon a change in control.
F-41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 14 – Current Vulnerability Due to Certain Concentrations
Market Concentrations
No customer represented greater than 10% of consolidated net revenue in 2023 or 2022.
A material portion of the Company's revenues are derived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets
have historically experienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereof could reduce
their purchases of the Company's products, which could have an adverse effect on the Company's results of operations and financial position.
Certain subsidiaries and product lines have customers which comprise greater than 10% of the subsidiary's or product line's net revenues. The loss of one of these
customers could have a material effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, which could result in an
impairment charge which could be material to the Company's consolidated financial statements.
Credit Risk Concentrations
Financial instruments with potential credit risk consist principally of cash and cash equivalents, short-term investments, accounts receivable, and notes receivable.
Concentrations of credit risk with respect to receivables are generally limited due to the Company’s large number of customers and their dispersion across many
countries and industries. As of December 31, 2023, one customer comprised 12.4% of the Company's accounts receivable balance. As of December 31, 2022,
one customer comprised 10.2% of the Company's accounts receivable balance. The Company continually monitors the credit risks associated with its accounts
receivable and adjusts the allowance for uncollectible accounts accordingly. The credit risk exposure associated with the accounts receivable is limited by the
allowance and is not considered material to the financial statements.
The Company maintains cash and cash equivalents and short-term investments with various major financial institutions. The Company is exposed to credit risk
related to the potential inability to access liquidity in financial institutions where its cash and cash equivalents and short-term investments are concentrated. As of
December 31, 2023, the following financial institutions held over 10% of the Company’s combined cash and cash equivalents and short-term investments balance:
JPMorgan*
Santander*
TD Bank*
MUFG Bank Ltd.*
Bank of America*
*Participant in Credit Facility
Sources of Supplies
16.2%
16.2%
15.0%
10.8%
10.1%
The production and sale of the Company’s products is reliant on a complex global interconnected supply chain of vendors, manufacturing facilities, third-party
foundries and subcontractors, shipping partners, distributors, and end market customers. Disruption in one part of the supply chain could cause disruption in all
other parts of the supply chain. Global shipping impacts several parts of the supply chain and the disruption experienced in recent years has, at times, negatively
impacted the Company’s ability to manufacture products and to deliver them to customers.
Although most materials incorporated into the Company's products are available from a number of sources, certain materials, including plastics and metals, are
produced in only a limited number of regions around the world or are available from only a limited number of suppliers. Suppliers periodically extend lead times,
face capacity constraints, limit supplies, increase prices, experience quality issues, or encounter cybersecurity or other issues that can interrupt or increase the cost
of our supply. The unavailability or reduced availability of these materials could require the Company to temporarily cease or reduce production or incur additional
costs.
Customer requirements and certain laws pertaining to the responsible sourcing of materials, including tantalum, tungsten, tin, gold, and cobalt, all of which are used
in the Company’s products, are increasing and becoming more stringent. Responsible sourcing efforts may result in increased prices and decreased availability of
these materials.
Many of the metals used in the manufacture of the Company’s products, including gold, copper, and palladium, are traded on active markets and can be subject to
significant price volatility. To ensure adequate supply and to provide cost certainty, the Company’s policy is to enter into short-term commitments to purchase
defined portions of annual consumption of the raw materials utilized if market prices decline below budget. If after entering into these commitments, the market
prices for these raw materials decline, losses are recognized on these adverse purchase commitments.
F-42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 14 – Current Vulnerability Due to Certain Concentrations (continued)
The Company's production can be disrupted by the unavailability of resources, such as water, energy, and gases. The unavailability or reduced availability of these
resources could require the Company to reduce production or incur additional costs.
The Company uses third-party foundries and subcontractors for certain of its manufacturing activities, primarily wafer fabrication and the assembly and testing of
finished goods. Establishing third-party contract manufacturer relationships can be time consuming and costly, and the number of qualified providers is limited. The
Company's agreements with these manufacturers typically require it to commit to purchase services based on forecasted product needs, which may be inaccurate,
and, in some cases, require the recognition of losses on these adverse purchase commitments. The Company's agreements may limit its ability to increase
production, particularly during periods of growing demand for our products.
Geographic Concentration
The Company has operations outside the United States, and approximately 74% of revenues earned during 2023 were derived from sales to customers outside the
United States. Additionally, as of December 31, 2023, $660,258 of the Company’s cash and cash equivalents and short-term investments were held by
subsidiaries outside of the United States. Some of the Company’s products are produced and cash and cash equivalents and short-term investments are held in
countries which are subject to risks of political, economic, and military instability. This instability could result in wars, riots, nationalization of industry, currency
fluctuations, and labor unrest. These conditions could have an adverse impact on the Company’s ability to operate in these regions and, depending on the extent
and severity of these conditions, could materially and adversely affect the Company’s overall financial condition, operating results, and ability to access its liquidity
when needed.
As of December 31, 2023 the Company’s cash and cash equivalents and short-term investments were concentrated in the following countries:
United States
People's Republic of China
Israel
The Republic of China (Taiwan)
Germany
Singapore
Other Asia
Other Europe
Other
50.2%
10.7%
10.6%
9.2%
6.8%
6.3%
3.8%
1.2%
1.2%
Certain of the Company's non-U.S. subsidiaries have cash and cash equivalents and short-term investments deposited in U.S. financial institutions.
Vishay has been in operation in Israel for 53 years. The Company has never experienced any material interruption in its operations attributable to these factors, in
spite of several Middle East crises, including wars.
F-43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 15 – Segment and Geographic Data
Vishay is a global manufacturer and supplier of electronic components. Vishay operates, and its chief operating decision maker makes strategic and operating
decisions with regards to assessing performance and allocating resources based on, six reporting segments: MOSFETs, Diodes, Optoelectronic Components,
Resistors, Inductors, and Capacitors. These segments represent groupings of product lines based on their functionality:
●
●
●
●
●
●
Metal oxide semiconductor field effect transistors ("MOSFETs") function as solid state switches to control power.
Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic discharge damage; or provide
electromagnetic interference filtering.
Optoelectronic components emit light, detect light, or do both.
Resistors are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.
Inductors use an internal magnetic field to change alternating current phase and resist alternating current.
Capacitors store energy and discharge it when needed.
Vishay's reporting segments generate substantially all of their revenue from product sales to the industrial, automotive, telecommunications, computing, consumer
products, power supplies, military and aerospace, and medical end markets. An immaterial portion of revenues are from royalties.
The Company’s chief operating decision maker uses operating income, exclusive of certain items ("segment operating income") to make decisions, allocate
resources, and assess performance, and the Company thus considers segment operating income to be its measure of segment profit or loss. Only dedicated, direct
selling, general, and administrative expenses of the segments are included in the calculation of segment operating income. The Company's calculation of segment
operating income excludes selling, general, and administrative costs of its global operations, sales and marketing, information systems, finance, and administration
groups, as well as restructuring and severance costs, the direct impact of the COVID-19 pandemic, and other items affecting comparability. Management believes
that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. These
items represent reconciling items between segment operating income and consolidated operating income. Business segment assets are the owned or allocated
assets used by each business.
F-44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 15 – Segment and Geographic Data (continued)
The following tables set forth business segment information:
MOSFETs Diodes
Components Resistors
Inductors Capacitors
Optoelectronic
Corporate /
Other
Total
Year ended December 31, 2023:
Net revenues
Segment Operating Income
Depreciation expense
Capital expenditures
$ 778,754
195,793
35,965
132,543
Total Assets as of December 31,
$
$ 690,540
153,462
44,904
62,185
243,146
42,963
16,496
23,228
$ 843,472
209,425
39,781
67,085
$ 347,392
99,684
14,963
10,767
$ 498,741
104,985
14,269
21,914
$
-
-
8,079
11,688
$ 3,402,045
$ 806,312
$ 174,457
$ 329,410
2023:
$ 702,299
$ 852,703
$
352,984
$ 946,585
$ 365,111
$ 459,653
$ 560,588
$ 4,239,923
Year ended December 31, 2022:
Net revenues
Segment Operating Income
Depreciation expense
Capital expenditures
$ 762,260
228,692
30,551
90,297
Total Assets as of December 31,
$
$ 765,220
176,422
40,014
69,126
296,384
85,456
14,065
27,776
$ 832,806
235,259
34,903
76,702
$ 331,086
93,453
14,927
35,102
$ 509,645
104,810
14,286
15,214
$
-
$ 3,497,401
(6,661) $ 917,431
$ 155,864
7,118
$ 325,308
11,091
2022:
$ 672,048
$ 814,017
$
385,388
$ 861,870
$ 322,893
$ 496,924
$ 312,513
$ 3,865,653
Year ended December 31, 2021:
Net revenues
Segment Operating Income
Depreciation expense
Capital expenditures
$ 667,998
148,652
30,257
44,227
$
$ 709,416
145,814
40,406
45,772
302,714
82,378
14,585
25,068
$ 752,554
190,953
34,344
57,729
$ 335,638
97,482
14,448
24,377
$ 472,167
85,342
17,129
13,099
$
-
-
8,078
8,100
$ 3,240,487
$ 750,621
$ 159,247
$ 218,372
Total Assets as of December 31,
2021:
________________
$ 503,937
$ 815,751
$
377,815
$ 783,390
$ 355,353
$ 496,129
$ 210,882
$ 3,543,257
Years ended December 31,
2022
2023
2021
Reconciliation:
Segment Operating Income
Impact of COVID-19 Pandemic on Selling, General, and Administrative Expenses
Unallocated Selling, General, and Administrative Expenses
Consolidated Operating Income (Loss)
Unallocated Other Income (Expense)
Consolidated Income Before Taxes
$
$
$
806,312
-
(320,168)
486,144
(18,742)
467,402
$
$
$
917,431
$
(546)
(301,399)
615,486
(21,981)
593,505
$
$
750,621
-
(282,819)
467,802
(33,192)
434,610
The Company has a broad line of products that it sells to OEMs, EMS companies, and independent distributors. The distribution of sales by customer type is
shown below:
Distributors
OEMs
EMS companies
Years Ended December 31,
2022
2023
2021
$
$
1,798,291
1,378,065
225,689
3,402,045
$
$
2,019,842
1,229,114
248,445
3,497,401
$
$
1,902,499
1,138,569
199,419
3,240,487
F-45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 15 – Segment and Geographic Data (continued)
Net revenues were attributable to customers in the following regions:
Asia
Europe
Americas
Years Ended December 31,
2022
2023
2021
$
$
1,255,563
1,255,652
890,830
3,402,045
$
$
1,347,893
1,146,898
1,002,610
3,497,401
$
$
1,392,267
1,072,025
776,195
3,240,487
The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, military and aerospace, medical, power
supplies, telecommunications, consumer products, and computing end markets. Sales by end market are presented below:
Industrial
Automotive
Military and Aerospace
Medical
Other*
Years Ended December 31,
2022
2023
2021
$
$
1,216,078
1,202,923
271,871
152,611
558,562
3,402,045
$
$
1,377,043
1,067,499
215,078
133,808
703,973
3,497,401
$
$
1,269,150
994,039
170,484
130,126
676,688
3,240,487
*Power supplies, telecommunications, consumer products, and computing
The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area:
United States
Germany
Other Europe
Israel
Asia
The following table summarizes property and equipment based on physical location:
United States
Germany
Other Europe
Israel
People's Republic of China
Republic of China (Taiwan)
Other Asia
Other
Years ended December 31,
2022
2023
2021
$
$
879,734
1,076,812
151,160
29,560
1,264,779
3,402,045
$
$
974,503
1,005,796
142,454
25,844
1,348,804
3,497,401
$
$
750,862
976,907
134,773
20,362
1,357,583
3,240,487
December 31,
2023
2022
$
$
162,428 $
305,504
148,646
98,800
250,209
207,515
108,055
13,489
1,294,646 $
144,112
229,449
118,672
87,174
250,669
192,456
98,332
9,595
1,130,459
F-46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 16 – Earnings Per Share
Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is
computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of restricted stock units (see Note
12), convertible debt instruments (see Note 6), and other potentially dilutive securities.
The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (shares in thousands):
Numerator:
Net earnings attributable to Vishay stockholders
Denominator:
Denominator for basic earnings per share:
Weighted average shares
Outstanding phantom stock units
Adjusted weighted average shares - basic
Effect of dilutive securities:
Restricted stock units
Convertible debt instruments
Dilutive potential common shares
Denominator for diluted earnings per share:
Adjusted weighted average shares - diluted
Years ended December 31,
2022
2023
2021
$
323,820
$
428,810
$
297,970
139,318
129
139,447
143,176
223
143,399
144,796
209
145,005
799
-
799
516
-
516
488
2
490
140,246
143,915
145,495
Basic earnings per share attributable to Vishay stockholders
Diluted earnings per share attributable to Vishay stockholders
$
$
2.32
$
2.99
$
2.31
$
2.98
$
2.05
2.05
Diluted earnings per share for the years presented do not reflect the following weighted average potential common shares, as the effect would be antidilutive (in
thousands):
Restricted stock units
Years ended December 31,
2022
2023
2021
82
251
279
If the average market price of Vishay common stock is less than the effective conversion prices of the convertible senior notes due 2025 and due 2030,
respectively, no shares are included in the diluted earnings per share computation for the convertible senior notes due 2025 and due 2030. Upon Vishay exercising
its existing right to legally amend the indenture governing the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per
$1 principal amount of converted notes and settle any additional amounts due in common stock. Pursuant to the indenture governing the convertible senior notes
due 2030, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in cash
and/or common stock. Accordingly, the convertible senior notes due 2025 and due 2030 are not anti-dilutive when the average market price of Vishay common
stock is less than the respective effective conversion prices of the convertible senior notes due 2025 and due 2030.
In connection with the issuance of the convertible senior notes due 2030, the Company entered into capped call transactions (see Note 6), which were not included
in the calculation of diluted earnings per share as their effect would have been anti-dilutive. The capped calls are intended to reduce the potential dilution to the
Company's common stock in the event that at the time of conversion of the convertible senior notes due 2030 the Company's common stock price exceeds the
conversion price of the convertible senior notes due 2030.
F-47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 17 – Additional Cash Flow Information
Changes in operating assets and liabilities, net of effects of businesses acquired, consist of the following:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Accounts payable
Other current liabilities
Net change in operating assets and liabilities
Years ended December 31,
2022
2023
2021
$
$
(3,717) $
(58,758)
(42,005)
743
(58,120)
(161,857) $
(26,696) $
(119,595)
(11,380)
(61,665)
77,223
(142,113) $
(67,707)
(121,492)
(35,377)
61,481
79,683
(83,412)
F-48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 18 – Fair Value Measurements
The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis:
December 31, 2023
Assets:
Assets held in rabbi trusts
Available for sale securities
Non - U.S. Defined Benefit Pension Plan Assets:
Equity securities
Fixed income securities
Cash
Liability:
MaxPower acquisition contingent consideration
December 31, 2022
Assets:
Assets held in rabbi trusts
Available for sale securities
Precious metals
Non - U.S. Defined Benefit Pension Plan Assets:
Equity securities
Fixed income securities
Cash
Liability:
MaxPower acquisition contingent consideration
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Total Fair
Value
Level 1
Level 2
Level 3
50,378
4,115
$
24,343
4,115
$
26,035
-
$
3,925
21,232
38,130
117,780
$
3,925
21,232
38,130
91,745
938
-
$
50,173
3,677
1,252
5,876
18,406
41,338
120,722
$
27,168
3,677
1,252
5,876
18,406
41,338
97,717
$
$
$
-
-
-
-
-
-
-
-
-
26,035
$
-
938
$
23,005
-
-
-
-
-
23,005
$
$
-
-
-
-
-
-
-
6,870
-
-
6,870
There have been no changes in the classification of any financial instruments within the fair value hierarchy in the periods presented.
The Company maintains non-qualified trusts, referred to as “rabbi” trusts, to fund payments under deferred compensation and non-qualified pension plans. Rabbi
trust assets consist primarily of marketable securities, classified as available-for-sale, and company-owned life insurance assets. The marketable securities held in
the rabbi trusts are valued using quoted market prices on the last business day of the year. The company-owned life insurance assets are valued in consultation with
the Company’s insurance brokers using the value of underlying assets of the insurance contracts. The fair value measurement of the marketable securities held in
the rabbi trust is considered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2 measurement within
the fair value hierarchy.
The Company maintains defined benefit retirement plans in certain of its non-U.S. subsidiaries. The assets of the plans are measured at fair value.
Equity securities held by the non-U.S. defined benefit retirement plans consist of equity securities that are valued based on quoted market prices on the last business
day of the year. The fair value measurement of the equity securities is considered a Level 1 measurement within the fair value hierarchy.
Fixed income securities held by the non-U.S. defined benefit retirement plans consist of government bonds in the Philippines and India and corporate notes that are
valued based on quoted market prices on the last business day of the year. The fair value measurement of the fixed income securities is considered a Level 1
measurement within the fair value hierarchy.
Cash held by the non-U.S. defined benefit retirement plans consists of demand deposits on account in various financial institutions to fund current benefit payments.
The carrying amount of the cash approximates its fair value.
The Company holds investments in debt securities that are intended to fund a portion of its pension and other postretirement benefit obligations outside of the U.S.
The investments are valued based on quoted market prices on the last business day of the year. The fair value measurement of the investments is considered a
Level 1 measurement within the fair value hierarchy.
F-49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 18 – Fair Value Measurements (continued)
From time to time, the Company purchases precious metals bullion in excess of its immediate manufacturing needs to mitigate the risk of supply shortages or volatile
price fluctuations. The metals are valued based on quoted market prices on the last business day of the period. The fair value measurement of the metals are
considered a Level 1 measurement within the fair value hierarchy. The inventory of precious metals bullion in excess of its immediate manufacturing needs was not
material at December 31, 2023.
The Company may be required to make certain contingent consideration payments to non-employee equity holders of MaxPower pursuant to the acquisition
agreement, which would be payable upon the achievement of certain technology milestones, upon favorable resolution of certain technology licensing matters with a
third party, and upon the disposition of MaxPower's investment in an equity affiliate. One of the contingencies was resolved in the fourth quarter of 2023, which
resulted in no additional payments to the former employees and equity holders of MaxPower. The fair value of these contingent payments is determined by
estimating the net present value of the expected cash flows based on the probability of expected payments. The fair value measurement of the contingent
consideration payments is considered a Level 3 measurement within the fair value hierarchy.
The fair value of the long-term debt, excluding the deferred financing costs, at December 31, 2023 and 2022 is approximately $836,200 and $491,100,
respectively, compared to its carrying value, excluding the deferred financing costs, of $845,102 and $507,344, respectively. The Company estimates the fair
value of its long-term debt using a combination of quoted market prices for similar financing arrangements and expected future payments discounted at risk-
adjusted rates, which are considered level 2 inputs.
At 2023 and 2022, the Company’s short-term investments were comprised of time deposits with financial institutions that have maturities that exceed 90 days from
the date of acquisition; however they all mature within one year from the respective balance sheet dates. The Company's short-term investments are accounted for
as held-to-maturity debt instruments, at amortized cost, which approximates their fair value. The investments are funded with excess cash not expected to be
needed for operations prior to maturity; therefore, the Company believes it has the intent and ability to hold the short-term investments until maturity. At each
reporting date, the Company performs an evaluation to determine if any unrealized losses are other-than-temporary. No other-than-temporary impairments have
been recognized on these securities, and there are no unrecognized holding gains or losses for these securities during the periods presented. There have been no
transfers to or from the held-to-maturity classification. All decreases in the account balance are due to returns of principal at the securities’ maturity dates. Interest
on the securities is recognized as interest income when earned.
At December 31, 2023 and 2022, the Company’s cash and cash equivalents were comprised of demand deposits, time deposits with maturities of three months or
less when purchased, and money market funds. The Company estimates the fair value of its cash, cash equivalents, and short-term investments using level 2 inputs.
Based on the current interest rates for similar investments with comparable credit risk and time to maturity, the fair value of the Company's cash, cash equivalents,
and held-to-maturity short-term investments approximate the carrying amounts reported in the accompanying consolidated balance sheets.
The Company’s financial instruments also include accounts receivable and accounts payable. The carrying amounts for these financial instruments reported in the
accompanying consolidated balance sheets approximate their fair values.
F-50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Note 19 – Related Party Transactions
Vishay Precision Group, Inc.
On July 6, 2010, Vishay completed the spin-off of its measurements and foil resistors businesses into an independent, publicly-traded company, Vishay Precision
Group, Inc. Vishay’s common stockholders received 1 share of VPG common stock for every 14 shares of Vishay common stock they held on the record date,
June 25, 2010, and Vishay’s Class B common stockholders received 1 share of VPG Class B common stock for every 14 shares of Vishay Class B common
stock they held on the record date.
Following the spin-off, VPG is an independent company and Vishay retains no ownership interest.
Relationship with VPG after Spin-off
Following the spin-off, VPG and Vishay operate separately, each as independent public companies. Vishay has no ownership interest in VPG. However, Ruta
Zandman solely or on a shared basis with Marc Zandman and Ziv Shoshani, all of whom are members of Vishay's Board of Directors, control a large portion of the
voting power of both Vishay and VPG. Marc Zandman, Vishay’s Executive Chairman of the Board and an executive officer of Vishay, serves on the Board of
Directors of VPG. Ziv Shoshani, CEO of VPG, serves as a director of Vishay. Additionally, Timothy V. Talbert, a member of Vishay’s Board of Directors is also
a member of the Board of Directors of VPG.
In connection with the completion of the spin-off, Vishay and its subsidiaries entered into several agreements with VPG and its subsidiaries that govern the
relationship of the parties following the spin-off. Among the agreements entered into with VPG and its subsidiaries were a transition services agreement, several
lease agreements, and supply agreements. None of the agreements have had nor are expected to have a material impact on Vishay’s financial position, results of
operations, or liquidity. Some of these agreements have expired and have not been renewed.
Vishay also entered into a trademark license agreement with VPG pursuant to which Vishay granted VPG the license to use certain trademarks, service marks,
logos, trade names, entity names, and domain names which include the term “Vishay.” The license granted VPG the limited, exclusive, royalty-free right and license
to use certain marks and names incorporating the term “Vishay” in connection with the design, development, manufacture, marketing, provision and performance of
certain VPG products that do not compete with any products within Vishay’s product range as constituted immediately following the separation and certain services
provided in connection with the products. The license cannot be terminated except as a result of willful misconduct or liquidation bankruptcy of VPG.
F-51
SUBSIDIARIES OF THE REGISTRANT
Exhibit 21
Note: Names of Subsidiaries are indented under name of Parent. Subsidiaries are wholly owned unless otherwise noted. (Directors' or other shares required by
statute in foreign jurisdictions and totaling less than 1% of equity are omitted.)
Vishay Americas, Inc.
Vishay Americas do Brasil, LTDA
Vishay Insurance, DAC
Vishay France Holdings SAS
Vishay MCB Industrie S.A.S.
Vishay Dale Electronics, LLC
Electronica Dale de Mexico S.A. de C.V.
Vishay HiRel Systems LLC
Vishay HiRel Systems International, LLC
Vishay Sprague, Inc.
Sprague Electric of Canada Limited
Siliconix incorporated
Vishay Siliconix, LLC
Siliconix Semiconductor, LLC
Siliconix Electronic Co. Ltd.
Vishay Siliconix Ireland Ltd.
Shanghai Simconix Electronic Company Ltd.
Siliconix Technology C.V.
Vishay Semiconductor Italiana S.p.A.
Vishay Siliconix Singapore Pte. Ltd.
Vishay Semiconductor India Pvt. Ltd.
Siliconix Singapore Pte Ltd
MaxPower Semiconductor, Inc.
MaxPower Semiconductor U.K., Ltd.
Vishay GSI, Inc.
Vishay GSI Holdings, LLC
Vishay General Semiconductor, L.P.
Vishay General Semiconductor, LLC
Vishay General Semiconductor of Taiwan, Ltd.
Vishay Capella Microsystems (Taiwan) Limited
Vishay Asia GS Investments Pte., Ltd.
ECOMAL Nederland BV
Vishay BCcomponents Holdings Ltd.
Vishay BCcomponents B.V.
Vishay Capacitors Belgium NV
Vishay Resistors Belgium BV
Vishay Components India Pvt. Ltd
Vishay BCcomponents Hong Kong Ltd.
Vishay Hong Kong Ltd.
Vishay Intertechnology Asia Pte Ltd.
Vishay Japan Co. Ltd.
Vishay Korea Co. Ltd.
Vishay (Taiwan) Ltd.
Vishay Malaysia Sdn. Bhd.
Vishay Dutch Holdings B.V.
Delaware
Brazil
Ireland
France
France
Delaware
Mexico
Delaware
Delaware
Delaware
Canada
Delaware
Delaware
Delaware
The Republic of China (Taiwan)
Ireland
China
Netherlands
Italy
Singapore
India
Singapore
Delaware
United Kingdom
Delaware
Delaware
Cayman Islands
Delaware
The Republic of China (Taiwan)
The Republic of China (Taiwan)
Singapore
Netherlands
Delaware
Netherlands
Belgium
Belgium
India
Hong Kong
Hong Kong
Singapore
Japan
Korea
The Republic of China (Taiwan)
Malaysia
Netherlands
(a)
(b)
(c)
Subsidiaries of the Registrant (continued)
Vishay Israel Limited
Z.T.R. Electronics Ltd.
ECOMAL Israel Ltd.
Vishay Polytech Co. Ltd.
Vishay La Laguna S. DE R.L. DE C.V.
Vishay Europe GmbH
Vishay Europe Sales GmbH
Vishay BCcomponents Austria GmbH
Vishay Semiconductor Ges.mbH
Vishay Electronic GmbH
Vishay Siliconix Itzehoe GmbH
Vishay Electronica Portugal Lda.
ECOMAL Europe GmbH
ECOMAL Sweden AB
ECOMAL Schweiz A.G.
ECOMAL Austria GmbH
Vishay Components, S.A.
ECOMAL Iberia S.A.U.
ECOMAL Belgium BV
ECOMAL Ceska republika S.r.O.
ECOMAL Denmark A/S
ECOMAL Finland OY
ECOMAL France S.A.S.
ECOMAL UK Ltd.
Vishay Ltd.
ECOMAL Italy s.r.l.
ECOMAL Elektronske Komponente d.o.o.
Vishay Electronic SPOL SRO
Ecomal Poland Sp. Z.o.o.
Ecomal Hungary Kft.
Vishay S.A.
Ultronix, Inc.
Vishay Semiconductor GmbH
Vishay (Phils.) Inc.
Siliconix Philippines, Inc.
Vishay Asia Semiconductor Investments Pte. Ltd.
Vishay Singapore Pte. Ltd.
Vishay Semiconductor Shanghai Co., Ltd.
Vishay General Semiconductor (China) Co., Ltd.
Vishay Micro-Electronics (Xi'an) Co., Ltd.
Vishay China Co. Ltd.
Vishay HiRel Systems Zhuhai Electronics Co Ltd
Vishay Components (Huizhou) Co. Ltd.
Vishay Hungary Elektronikai KFT
Vishay Semiconductor Malaysia Sdn Bhd
Vishay BCcomponents Beyschlag GmbH
Israel
Israel
Israel
Japan
Mexico
Germany
Germany
Austria
Austria
Germany
Germany
Portugal
Germany
Sweden
Switzerland
Austria
Spain
Spain
Belgium
Czech Republic
Denmark
Finland
France
United Kingdom
United Kingdom
Italy
Slovenia
Czech Republic
Poland
Hungary
France
Delaware
Germany
Philippines
Philippines
Singapore
Singapore
China
China
China
China
China
China
Hungary
Malaysia
Germany
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Subsidiaries of the Registrant (continued)
(a) - Registrant's indirect ownership percentage in Siliconix Technology C.V. is 100%; 89% is owned by its wholly owned subsidiary Siliconix Incorporated,
10% is owned by its indirectly wholly owned subsidiary Siliconix Semiconductor, LLC, and 1% is owned by its indirect wholly owned subsidiary Vishay
Siliconix LLC.
(b) - Registrant's indirect ownership percentage in Vishay General Semiconductor, L.P. is 100%; 1% is owned by its indirectly wholly owned subsidiary Vishay
GSI Holdings, LLC, and 99% is owned by its wholly owned subsidiary Vishay GSI, Inc.
(c) - Registrant's indirect ownership percentage in Vishay Components India Pvt. Ltd. is 100%; 69% is owned directly and 31% is owned by its indirectly
wholly owned subsidiary Vishay BCcomponents B.V.
(d) - Registrant's indirect ownership percentage in Ecomal Israel Ltd. is 66.7%.
(e) - Registrant's indirect ownership percentage in Vishay La Laguna S. DE R.L. DE C.V. is 100%; 99% is owned by its wholly owned subsidiary Vishay Israel
(f) -
Limited and 1% is owned by its indirectly wholly owned subsidiary Z.T.R. Electronics Ltd.
Registrant's indirect ownership percentage in Vishay Europe GmbH is 100%; over 99.9% is owned directly or indirectly by its wholly owned subsidiary
Vishay Israel Limited and its affiliates; and less than 0.1% is owned directly.
(g) - Registrant's indirect ownership percentage in Vishay Electronica Portugal Lda. is 100%; 70% is owned by its indirectly wholly owned subsidiary Vishay
Europe GmbH and 30% is owned by its indirectly wholly owned subsidiary Vishay Electronic GmbH.
(h) - Registrant's indirect ownership percentage in Vishay S.A. is 99.9%.
(i) -
Registrant's indirect ownership percentage in Vishay Singapore Pte. Ltd. is 100%, 48% is owned by its indirectly wholly owned subsidiary Vishay Asia
Semiconductor Investments Pte. Ltd., 26% is owned by its indirectly wholly owned subsidiary Vishay Asia Semiconductor GS Investments Pte. Ltd., and
26% is owned by its indirectly wholly owned subsidiary Siliconix Technology C.V.
Registrant's indirect ownership percentage in Vishay Components (Huizhou) Co. Ltd. is 100%; 36% is owned by its indirectly wholly owned subsidiary
Vishay Hong Kong Ltd. and 64% is owned by its indirectly wholly owned subsidiary Vishay China Co. Ltd.
(j) -
Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
We consent to the incorporation by reference in the following Registration Statements:
1) Registration Statement (Form S-8 No. 333-144466) pertaining to the 2007 Stock Incentive Program of Vishay Intertechnology, Inc.,
2) Registration Statement (Form S-8 No. 333-178895) pertaining to the Deferred Compensation Plan of Vishay Intertechnology, Inc.,
3) Registration Statement (Form S-8 No. 333-196143) pertaining to the 2007 Stock Incentive Program of Vishay Intertechnology, Inc., and
4) Registration Statement (Form S-8 No. 333-272140) pertaining to the 2023 Long-Term Incentive Plan of Vishay Intertechnology, Inc.
of our reports dated February 16, 2024, with respect to the consolidated financial statements of Vishay Intertechnology, Inc. and the effectiveness of internal
control over financial reporting of Vishay Intertechnology, Inc. included in this Annual Report (Form 10-K) of Vishay Intertechnology, Inc. for the year ended
December 31, 2023.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 16, 2024
I, Joel Smejkal, certify that:
CERTIFICATIONS
1. I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.;
Exhibit 31.1
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control
over financial reporting.
Date: February 16, 2024
/s/ Joel Smejkal
Joel Smejkal
Chief Executive Officer
I, Lori Lipcaman, certify that:
CERTIFICATIONS
1. I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.;
Exhibit 31.2
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control
over financial reporting.
Date: February 16, 2024
/s/ Lori Lipcaman
Lori Lipcaman
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December 31, 2023 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Joel Smejkal, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Joel Smejkal
Joel Smejkal
Chief Executive Officer
February 16, 2024
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December 31, 2023 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Lori Lipcaman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Lori Lipcaman
Lori Lipcaman
Chief Financial Officer
February 16, 2024
[This page intentionally left blank]
Board of Directors
Marc Zandman
Executive Chairman of the Board of Directors
Chief Business Development Officer
Vishay Intertechnology, Inc.
Dr. Renee Booth
President
Chief Executive Officer
Leadership Solutions, Inc.
Michael J. Cody
Retired Vice President of
Corporate Development
Raytheon Company
Dr. Michiko Kurahashi
Digital Marketing Consultant
previously Chief Marketing Officer
at AXIS Capital
Dr. Abraham Ludomirski
Founder and Managing Director
of Vitalife Fund, a venture capital
company specializing in high tech
electronic medical devices
John Malvisi
Retired Senior Partner
Deloitte & Touche LLP’s audit practice
Ziv Shoshani
President
Chief Executive Officer
Vishay Precision Group, Inc.
Joel Smejkal
President
Chief Executive Officer
Vishay Intertechnology, Inc.
Timothy V. Talbert
Retired Senior Vice President
Credit and Originations Lease
Corporation of America
Retired President
LCA Bank Corporation
Jeffrey H. Vanneste
Retired Chief Financial Officer
Lear Corporation
Term expires at the 2024 Annual Meeting.
Ruta Zandman
Private Stockholder
Vishay Intertechnology, Inc.
Raanan Zilberman
Former President and
Chief Executive Officer
of multiple international companies
Honorary Executive Chairman of the Board
Dr. Felix Zandman
(Deceased June 4, 2011)
Stockholder Assistance
Duplicate Mailings
For information about stock transfers,
dividend payments, address changes,
account consolidation, registration
changes, lost stock certificates, and Form
1099, please contact the Company’s
Transfer Agent and Registrar.
Transfer Agent and Registrar
Computershare Inc.
Website: www.computershare.com
Telephone inquiries:
1-800-736-3001, (U.S.)
1-781-575-3100, (non-U.S.)
E-mail inquiries:
web.queries@computershare.com
Written requests:
By Mail: Computershare, Inc.
P.O. Box 43078
Providence RI 02940-3078
Common Stock
Ticker symbol: VSH
The common stock is listed and principally
traded on the New York Stock Exchange.
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CORPORATE INFORMATION
Executive Officers
Marc Zandman
Executive Chairman of the Board of Directors
Chief Business Development Officer
Joel Smejkal
President
Chief Executive Officer
Jeff Webster
Executive Vice President
Chief Operating Officer
David McConnell
Executive Vice President
Chief Financial Officer
Roy Shoshani
Executive Vice President
Chief Technical Officer
Michael O’Sullivan
Executive Vice President
Chief Administrative and Legal Officer
Peter Henrici
Executive Vice President
Corporate Development
Corporate Office
Vishay Intertechnology, Inc.
63 Lancaster Avenue
Malvern, PA 19355-2120
Phone: 610.644.1300
www.vishay.com
Annual Meeting
May 21st, 2024 at 9 AM ET
The annual meeting will be conducted
completely online via the internet.
Stockholders may attend and participate
in the meeting by visiting www.
virtualshareholdermeeting.com/VSH2024.
2023 Annual Report
Vishay Intertechnology, Inc.
63 Lancaster Avenue
Malvern, PA 19355-2120
United States
610.644.1300
www.vishay.com
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and other parties. All rights reserved.