Vishay Intertechnology (VSH) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $735.4 million, flat sequentially but down 13.9% year-over-year, amid ongoing inventory destocking, weak industrial demand, and lower ASPs.

• GAAP net loss attributable to stockholders was $19.3 million, or $(0.14) per share, compared to net income of $65.5 million in Q3 2023; adjusted EPS was $0.08.

• Book-to-bill ratio was 0.88 overall, with backlog at quarter end of 4.4 months.

• Restructuring actions in Q3 2024 resulted in $40.6 million in charges, targeting facility closures and workforce reductions for annualized savings of up to $23 million by 2026.

• Strategic initiatives focus on capacity expansion, product portfolio growth, and operational efficiency to prepare for the next upcycle.

Financial highlights

• Gross margin for Q3 2024 was 20.5%, down from 22.0% in Q2 and 27.8% in Q3 2023, impacted by lower volume, ASPs, and Newport integration.

• Operating margin was -2.5% due to restructuring charges; adjusted operating margin was 3%.

• Adjusted EBITDA for Q3 2024 was $71.5 million, with a margin of 9.7%, down from 18.7% in Q3 2023.

• Free cash flow for Q3 2024 was negative $8.8 million, improved from negative $87 million in Q2; for the nine months ended September 28, 2024, free cash flow was $(67.7) million.

• Cash and cash equivalents at quarter-end were $643.8 million; net cash and short-term investments (debt) was $(163.5) million.

Outlook and guidance

• Q4 2024 revenue expected at $720 million ± $20 million; gross margin guidance at 20.0% ± 50 bps, with Newport expected to drag Q4 gross margin by 175–200 bps.

• Full-year 2024 CapEx planned at $360–$390 million, down from the original $435 million plan.

• Free cash flow is expected to remain pressured by high capex through 2025, with improvement anticipated thereafter.

• The company remains committed to at least $100 million in shareholder returns for 2024.