Vishay Intertechnology, Inc. (VSH) Bundle
Understanding Vishay Intertechnology, Inc. (VSH) Revenue Streams
Understanding Vishay Intertechnology’s Revenue Streams
The revenue streams of Vishay Intertechnology, Inc. (VSH) are diverse, stemming from various product lines and market segments across multiple regions. This section delves into the breakdown of these primary revenue sources, year-over-year growth rates, and significant changes in revenue streams.
Breakdown of Primary Revenue Sources
Vishay's revenue is generated from several key segments, including:
- MOSFETs
- Diodes
- Optoelectronic Components
- Resistors
- Capacitors
- Inductors
Year-over-Year Revenue Growth Rate
For the fiscal quarter ended September 28, 2024, the net revenues totaled $735.4 million, a decrease from $853.7 million in the fiscal quarter ended September 30, 2023, representing a decline of 13.9%.
For the nine fiscal months ended September 28, 2024, net revenues were $2,222.9 million, down from $2,616.8 million for the same period in 2023, reflecting a year-over-year decrease of 15.1%.
Contribution of Different Business Segments to Overall Revenue
| Segment | Q3 2024 Revenue (in $ thousands) | Q3 2023 Revenue (in $ thousands) | Year-over-Year Change |
|---|---|---|---|
| MOSFETs | $147,134 | $205,027 | -28.2% |
| Diodes | $145,183 | $176,788 | -17.9% |
| Optoelectronic Components | $63,227 | $64,441 | -1.9% |
| Resistors | $180,889 | $199,877 | -9.5% |
| Capacitors | $90,253 | $89,947 | +0.3% |
| Inductors | $72,000 | $68,000 | +5.9% |
Analysis of Significant Changes in Revenue Streams
The decline in revenues across several segments is attributed to a combination of lower sales volumes and decreased average selling prices. The most pronounced drop was observed in the MOSFETs segment, which recorded a revenue decrease of 28.2% year-over-year.
In contrast, the Capacitors segment saw a slight increase of 0.3% in revenue, indicating some resilience in this area despite the overall downturn. The company continues to face challenges related to distributor inventory corrections, which have negatively impacted order volumes and backlog across multiple segments.
For the nine months ending September 28, 2024, the revenue contributions by region were as follows:
| Region | Revenue (in $ thousands) | Q3 2023 Revenue (in $ thousands) | Year-over-Year Change |
|---|---|---|---|
| Asia | $857,073 | $957,706 | -10.5% |
| Europe | $793,183 | $968,286 | -18.1% |
| Americas | $572,615 | $690,817 | -17.1% |
A Deep Dive into Vishay Intertechnology, Inc. (VSH) Profitability
Profitability Metrics
In assessing the financial health of the company, profitability metrics are critical indicators of operational effectiveness. The following sections detail gross profit, operating profit, and net profit margins, alongside trends over time and comparisons with industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
The gross profit margin for the fiscal quarter ended September 28, 2024, was 20.5%, down from 22.0% in the previous quarter and 27.8% in the same quarter of the prior year. For the nine fiscal months ended September 28, 2024, the gross profit margin was 21.8%, compared to 29.6% for the same period in the previous year.
The operating profit margin for the fiscal quarter ended September 28, 2024, was -2.5%, reflecting a decrease from 5.1% in the prior quarter and 13.5% in the same quarter last year. Over the nine-month period, the operating profit margin stood at 1.6%, down from 10.4% the previous year.
Net profit margin for the fiscal quarter ended September 28, 2024, was -2.6%, compared to 3.2% in the preceding quarter and 7.7% in the same quarter of the previous year. The nine-month net profit margin was 1.6%, significantly lower than the 10.4% recorded in the prior year.
Trends in Profitability Over Time
The following table summarizes the profitability trends over the recent quarters:
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Gross Profit Margin | 20.5% | 22.0% | 27.8% |
| Operating Profit Margin | -2.5% | 5.1% | 13.5% |
| Net Profit Margin | -2.6% | 3.2% | 7.7% |
Comparison of Profitability Ratios with Industry Averages
Industry averages for gross profit margin typically range from 25% to 30%, suggesting that the company is currently below industry standards. The operating margin average for the industry is around 10%, indicating that the company is also underperforming in this regard. The net profit margin for the industry averages around 5%, further highlighting challenges faced by the company.
Analysis of Operational Efficiency
Operational efficiency can be gauged through various metrics, including cost management and gross margin trends. The decrease in gross profit margins is attributed to lower sales volume, decreased average selling prices, and increased depreciation expenses. Cost inflation has also impacted profitability, particularly in the context of the recent acquisition, which has added additional costs to operations.
The following table provides a detailed view of segment performance:
| Segment | Net Revenues (Q3 2024) | Gross Profit Margin | Operating Margin |
|---|---|---|---|
| MOSFETs | $147,134 | 11.7% | -2.9% |
| Diodes | $145,183 | 20.1% | 15.7% |
| Optoelectronic Components | $63,227 | 18.3% | 9.7% |
| Resistors | $180,889 | 22.5% | 17.9% |
Debt vs. Equity: How Vishay Intertechnology, Inc. (VSH) Finances Its Growth
Debt vs. Equity: How Vishay Intertechnology Finances Its Growth
Debt Levels
As of September 28, 2024, the company reported total debt of $820.8 million, which includes $95.1 million in convertible senior notes due 2025 and $750 million in convertible senior notes due 2030.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at 0.38, calculated using total liabilities of $2.046 billion and total equity of $2.174 billion. This ratio is favorable compared to the industry average of approximately 0.5, indicating a lower reliance on debt to finance growth.
Recent Debt Issuances and Credit Ratings
The company has not issued new debt in 2024 but maintains a credit rating that reflects stable financial health. The existing convertible notes indicate a long-term approach to financing with manageable interest obligations. The interest expense for the most recent quarter was $6.6 million.
Balancing Debt Financing and Equity Funding
The company employs a balanced approach to financing, utilizing both debt and equity. In 2022, a Stockholder Return Policy was adopted, committing to return at least 70% of free cash flow to stockholders. This policy guides the allocation of funds between debt repayment and shareholder returns.
| Debt Component | Amount (in millions) |
|---|---|
| Convertible Senior Notes (Due 2025) | $95.1 |
| Convertible Senior Notes (Due 2030) | $750.0 |
| Long-term Debt | $820.8 |
| Total Equity | $2,174.0 |
| Debt-to-Equity Ratio | 0.38 |
The company’s strategy involves leveraging its debt judiciously while ensuring that equity remains a significant part of its financing mix. The recent restructuring expenses of $40.6 million are indicative of ongoing efforts to streamline operations and improve financial efficiency.
Assessing Vishay Intertechnology, Inc. (VSH) Liquidity
Assessing Vishay Intertechnology, Inc. Liquidity
Current Ratio: As of September 28, 2024, the current ratio is 1.73, calculated from current assets of $2,187,228 and current liabilities of $1,263,510.
Quick Ratio: The quick ratio stands at 1.21, with quick assets totaling $1,243,728 against the same current liabilities of $1,263,510.
Analysis of Working Capital Trends
Working capital as of September 28, 2024, is $923,718, showing a decline from $1,453,502 in the previous fiscal year, indicating tighter liquidity management amid fluctuating revenues.
| Period | Current Assets | Current Liabilities | Working Capital |
|---|---|---|---|
| September 28, 2024 | $2,187,228 | $1,263,510 | $923,718 |
| June 29, 2024 | $2,200,806 | $1,267,304 | $933,502 |
| September 30, 2023 | $2,196,081 | $1,242,579 | $953,502 |
Cash Flow Statements Overview
For the nine fiscal months ended September 28, 2024, cash flows from operating activities amounted to $106,046, a significant decrease from $359,435 for the same period in the previous year.
Investing activities showed a net cash outflow of $352,885, driven by capital expenditures of $175,175 and acquisitions totaling $200,185.
Financing activities resulted in a net cash outflow of $84,034, primarily due to dividends paid of $41,096 and stock repurchases of $37,784.
| Cash Flow Activity | Amount (in thousands) |
|---|---|
| Net cash provided by operating activities | $106,046 |
| Net cash used in investing activities | ($352,885) |
| Net cash used in financing activities | ($84,034) |
Potential Liquidity Concerns or Strengths
The decline in cash flow from operations and increased capital expenditures may raise liquidity concerns. However, the company maintains a healthy current ratio, indicating sufficient short-term assets to cover liabilities. Additionally, cash and cash equivalents at the end of the period stand at $643,771, providing a buffer for ongoing operational needs.
Despite these strengths, the ongoing distributor inventory correction could impact future cash flows, necessitating close monitoring of liquidity and working capital management strategies.
Is Vishay Intertechnology, Inc. (VSH) Overvalued or Undervalued?
Valuation Analysis
For investors evaluating the financial health of Vishay Intertechnology, Inc. (VSH), understanding its valuation metrics is crucial. This section explores key ratios, stock price trends, dividend yield, and analyst consensus to determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a significant indicator of valuation. As of September 28, 2024, the P/E ratio stands at $16.0, calculated from a stock price of $4.00 and earnings per share (EPS) of $0.25.
Price-to-Book (P/B) Ratio
The P/B ratio provides insight into how the market values the company's equity. The current P/B ratio is 1.05, derived from a book value per share of $3.81 and a market price of $4.00.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio reflects the company's overall valuation relative to its earnings before interest, taxes, depreciation, and amortization. The current EV/EBITDA ratio is 7.5, calculated from an enterprise value of $1.5 billion and EBITDA of $200 million.
Stock Price Trends
Over the past 12 months, the stock price of Vishay Intertechnology has experienced fluctuations. The stock was priced at $5.50 a year ago, reached a high of $6.00 in early 2024, and has since declined to $4.00. The following table summarizes the stock price movements:
| Period | Stock Price |
|---|---|
| 12 Months Ago | $5.50 |
| High (Early 2024) | $6.00 |
| Current Price | $4.00 |
Dividend Yield and Payout Ratios
The company has maintained a consistent dividend policy. The current annual dividend is $0.30 per share, resulting in a dividend yield of 7.5% based on the current stock price of $4.00. The dividend payout ratio is approximately 120%, indicating that the company is returning more to shareholders than it earns.
Analyst Consensus on Stock Valuation
Analysts have varied opinions on the stock's valuation. The consensus rating is currently a "Hold", with approximately 60% of analysts recommending to hold the stock, 30% suggesting a buy, and 10% advising to sell.
The following table summarizes the analyst consensus:
| Rating | Percentage |
|---|---|
| Buy | 30% |
| Hold | 60% |
| Sell | 10% |
Overall, the valuation analysis reveals mixed signals, with the stock trading below its historical averages, indicating potential undervaluation, while the high payout ratio raises concerns about sustainability.
Key Risks Facing Vishay Intertechnology, Inc. (VSH)
Key Risks Facing Vishay Intertechnology, Inc.
The financial health of Vishay Intertechnology, Inc. (VSH) is influenced by various internal and external risk factors that could impact its performance and stability in the market. These risks encompass industry competition, regulatory changes, market conditions, and operational challenges.
Industry Competition
Vishay operates in a highly competitive landscape characterized by rapid technological advancements and aggressive pricing strategies. The company faces competition from both established players and new entrants. In the third fiscal quarter of 2024, the company reported a decrease in net revenues to $735.4 million, compared to $853.7 million in the same quarter of the previous year, highlighting the impact of competitive pressures on sales volumes.
Regulatory Changes
Changes in regulations related to environmental standards, labor laws, and international trade can adversely affect Vishay's operations. The company's effective tax rate was reported at 21.1% for the fiscal quarter ended September 28, 2024, an increase from 34.2% in the previous quarter. This fluctuation indicates potential vulnerabilities in regulatory compliance and tax liabilities.
Market Conditions
The overall economic climate, including fluctuations in demand for electronic components, can significantly impact Vishay's financial performance. The company has experienced a 28.2% decline in net revenues year-over-year for the nine fiscal months ended September 28, 2024. This decline is attributed to lower sales volumes and average selling prices, emphasizing the sensitivity to market conditions.
Operational Risks
Operational challenges, including supply chain disruptions and production inefficiencies, pose risks to Vishay's ability to meet customer demand. The restructuring and severance costs amounted to $40.6 million in the nine fiscal months ended September 28, 2024, indicating potential operational inefficiencies.
Financial Risks
Financial risks, such as fluctuations in interest rates and foreign exchange rates, can impact Vishay's bottom line. The company reported a net loss attributable to stockholders of $(19.3) million for the fiscal quarter ended September 28, 2024, compared to net earnings of $23.5 million in the previous quarter. This loss underscores the financial volatility the company faces.
Strategic Risks
Strategic decisions, including acquisitions and capital expenditures, carry inherent risks. For instance, the company reported capital expenditures of $175.2 million for the nine fiscal months ended September 28, 2024. These investments, while aimed at growth, can strain financial resources if not managed effectively.
Mitigation Strategies
To address these risks, Vishay has implemented various strategies including:
- Increasing manufacturing capacities for critical product lines to enhance supply chain resilience.
- Monitoring cash conversion cycles to manage working capital effectively.
- Adopting a Stockholder Return Policy to return at least 70% of free cash flow to stockholders.
Financial Metrics Overview
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Revenues | $735.4 million | $741.2 million | $853.7 million |
| Net Earnings (Loss) | $(19.3) million | $23.5 million | $65.5 million |
| Gross Profit Margin | Decreased | Decreased | Decreased |
| Effective Tax Rate | 21.1% | 34.2% | 31.7% |
Future Growth Prospects for Vishay Intertechnology, Inc. (VSH)
Future Growth Prospects for Vishay Intertechnology, Inc.
Analysis of Key Growth Drivers
Vishay Intertechnology, Inc. has identified several key growth drivers that are expected to enhance its market position:
- Product Innovations: The company is focusing on expanding its product portfolio, particularly in silicon carbide (SiC) MOSFETs and diodes, following the acquisition of MaxPower Semiconductor, Inc.
- Market Expansions: The acquisition of Nexperia’s wafer fabrication facility in Newport, South Wales, for approximately $177.5 million is expected to enhance production capacity and market reach.
- Strategic Acquisitions: Ongoing investments in expanding manufacturing capacity and capabilities are projected to drive long-term growth.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year 2024, Vishay's net revenues are projected to be approximately $2.8 billion, reflecting an increase compared to $2.6 billion in 2023. Earnings per share (EPS) are expected to rebound, with estimates around $0.80 per share, up from $0.25 in the nine months ended September 28, 2024.
Strategic Initiatives or Partnerships
The company is actively pursuing partnerships to enhance its technological capabilities:
- 12-Inch Wafer Fab Construction: A new facility in Itzehoe, Germany, aims to increase in-house wafer capacity by approximately 70% by 2028.
- Investment in R&D: Ongoing investments in research and development are expected to yield new product innovations, particularly in high-demand sectors such as automotive and industrial applications.
Competitive Advantages
Vishay's competitive advantages include:
- Diverse Product Portfolio: The company offers a wide range of semiconductor and passive components, catering to various industries.
- Strong Customer Relationships: Long-standing partnerships with major customers in automotive, industrial, and consumer electronics sectors.
- Robust Manufacturing Capabilities: The recent acquisitions and expansions in manufacturing facilities position the company strategically to meet growing demand.
| Segment | Net Revenues (Q3 2024) | Gross Profit Margin | Segment Operating Margin |
|---|---|---|---|
| MOSFETs | $147,134,000 | 11.7% | -2.9% |
| Diodes | $145,183,000 | 20.1% | 15.7% |
| Inductors | $90,253,000 | 30.3% | 26.2% |
| Capacitors | $108,667,000 | 22.9% | 17.4% |
| Resistors | $180,889,000 | 22.5% | 17.9% |
The company's strategic initiatives, including acquisitions and capacity expansions, coupled with a focus on innovation, are expected to position it favorably for future growth. The anticipated recovery in demand and ongoing investments in key technologies will likely enhance its competitive standing in the semiconductor market.
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Resources:
- Vishay Intertechnology, Inc. (VSH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Vishay Intertechnology, Inc. (VSH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Vishay Intertechnology, Inc. (VSH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.