VISHAY INTERTECHNOLOGY INC
For the period ended Mar 29, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2025 · Filed May 7, 2025
VSH$23.28+5.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-28; filed 2024-11-06.
0000103730-24-000122
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-07.
0000103730-25-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 135 current paragraphs.
78 unchanged; 36 reworded; 18 added; 32 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 35 previous and 34 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
We are focused on realizing the full value of our broad product portfolio, becoming a customer-first company, and capitalizing on the mega trends of e-mobility, sustainability, and connectivity to drive top line growth, expand margins, and optimize stockholder returns. We are using eight strategic levers to achieve these goals. Despite the industry recovery being slower than expected, we remain committed to our long-term plan of increasing our capacity to assure our customers of reliable volume as they scale. While we plan to advance our capacity expansion projects, we have and will continue to modulate spending in response to order flow and the timing of customer demand and qualification. The decreased lead time for equipment and the increased subcontractor capacity are also variables that allow us to adjust our capacity spending. For 2025, we plan to spend between $300 million to $350 million for capital expenditures, at least 70% of which will be invested in capacity expansion projects for high growth products lines, including our wafer fab expansions.
Current report
Recent Developments
Current report
The newly announced U.S. tariffs will impact our future results. The tariff rates and application are currently unsettled and any potential demand distraction is not able to be estimated at this time. Historically, we have charged tariff adders to customers to offset increased costs. The gross profit impact of the tariffs and tariff adders is approximately zero, but they negatively impact gross profit margin.
Current report
The announcement of the U.S. tariffs has resulted in significant market volatility. A decrease in our common stock price could impact our goodwill impairment assessment if a stock price recovery does not take place.
Current report
Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to lower average selling prices and higher fixed costs. Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year quarter.
Current report
Segment operating margin decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to gross profit decreases.
Current report
Segment operating margin decreased versus the prior fiscal quarter and prior year quarter. The decreases are primarily due to decreased gross profit.
Current report
Net revenues of our Optoelectronic Components segment increased versus the prior fiscal quarter and the prior year quarter. The increases are primarily due to increased sales to distribution customers and industrial end market customers. Sales to customers in all regions increased versus the prior fiscal quarter and in the Asia and Americas regions versus the prior year quarter.
Current report
Gross profit margin increased versus the prior fiscal quarter and the prior year quarter. The increases are primarily due to higher sales volume. Higher average selling prices also contributed to the increase versus the prior fiscal quarter.
Current report
Segment operating margin increased versus the prior fiscal quarter and the prior year quarter. The increases are primarily due to gross profit increases.
Current report
Gross profit margin increased versus the prior fiscal quarter, but decreased versus the prior year quarter. The increase versus the prior fiscal quarter is primarily due to higher sales volume. The decrease versus the prior year quarter is primarily due to lower average selling prices.
Current report
Segment operating margin increased versus the prior fiscal quarter, but decreased versus the prior year quarter. The changes are primarily due to fluctuations in gross profit.
Current report
Gross profit margin decreased versus the prior fiscal quarter and prior year quarter. The decreases are primarily due to lower average selling prices, higher variable costs, and manufacturing inefficiencies. Lower sales volume also contributed to the decrease versus the prior year quarter.
Current report
Segment operating margin decreased versus the prior fiscal quarter and prior year quarter. The decreases are primarily due to gross profit decreases.
Current report
Net revenues of the Capacitors segment decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to decreased sales to military and aerospace end market customers and customers in the Americas region, partially offset by increased sales to customers in the Europe region. Decreased sales to OEM customers also contributed to the decrease versus the prior fiscal quarter, while increased sales to distribution customers partially offset the decrease. Decreased sales to customers in the Asia region also contributed to the decrease versus the prior year quarter, while increased sales to industrial market end customers partially offset the decrease.
Current report
Gross profit margin decreased versus the prior fiscal quarter and prior year quarter. The decreases are primarily due to lower average selling prices, higher fixed costs, and negative foreign currency exchange rate fluctuations.
Current report
Cash paid for property and equipment for the three fiscal months ended March 29, 2025 was $61.6 million, as compared to $53.1 million for the three fiscal months ended March 30, 2024. 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 remain committed to our long-term plan of increasing Vishay's capacity, to assure our customers of reliable volume as they scale. While we plan to advance our capacity expansion projects, we have and will continue to modulate spending in response to order flow and the timing of customer demand and qualifications. The decreased lead time for equipment and the increased subcontractor capacity are also variables that allow us to adjust our capacity spending. For 2025, we plan to spend between $300 million to $350 million for capital expenditures, at least 70% of which will be invested in capacity expansion projects for high growth product lines, including our wafer fab expansions.
Current report
Pursuant to the credit facility, the financial maintenance covenants include (a) an interest coverage ratio of not less than 3.25 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). Net leverage ratio reduces the measure of outstanding debt by up to $250 million of unrestricted cash.
Removed paragraphs (32)
Previous report
On March 5, 2024, we completed the acquisition of Nexperia’s wafer fabrication facility and operations located in Newport, South Wales, U.K. for approximately $177.5 million in cash, net of cash acquired. The wafer fabrication facility is located on 28 acres and is an automotive-certified, 200mm semiconductor wafer fab with capacity to produce more than 30,000 wafers per month. We plan to position the facility as a manufacturing excellence center and use it as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities. We expect the facility to initially generate a net loss while we invest in new equipment and qualify new products.
Previous report
Net revenues for the nine fiscal months ended September 28, 2024 were $2,222.9 million, compared to $2,616.8 million for the nine fiscal months ended September 30, 2023. The net earnings attributable to Vishay stockholders for the nine fiscal months ended September 28, 2024 were $35.2 million, or $0.25 per diluted share, compared to $272.3 million, or $1.94 per diluted share for the nine fiscal months ended September 30, 2023.
Previous report
Our free cash results were significantly impacted by the installment payments of the U.S. transition tax of $37.6 million and $27.7 million in the second fiscal quarters of 2024 and 2023, respectively, and $15.0 million of payments of withholding taxes on foreign earnings for the $120.0 million that was repatriated to the U.S. in the second fiscal quarter of 2024.
Previous report
We have determined that substantially all unremitted foreign earnings in Germany and Israel are no longer indefinitely reinvested. These indefinite reinvestment assertions provide greater access to our worldwide cash balances to fund our growth plan and our Stockholder Return Policy, but also negatively impact our effective tax rate.
Previous report
Goodwill
Previous report
Goodwill represents the excess of the cost of businesses acquired over the fair value of the related net assets at the date of acquisition. Goodwill is not amortized but rather is 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. We perform our annual goodwill impairment test as of the first day of the fourth fiscal quarter. During the third fiscal quarter of 2024, we identified the decrease in our share price in combination with the increase in the book value of our assets as a result of our acquisition and capital spending activities as potential indicators of impairment requiring an interim goodwill impairment test. The interim goodwill impairment test was performed as of September 28, 2024.
Previous report
We performed a quantitative assessment of each of our reporting units using an equal weighting of income (discounted cash flow) and market approaches to determine fair value. We determined that the estimated fair value of each reporting unit exceeded its carrying value, although the MOSFETs reporting unit’s fair value exceeded its carrying value by less than 10%. No goodwill impairment charges were recognized, but if the MOSFETs reporting unit is not able to achieve itsanticipated results and/or if its discount rate were to increase, its fair value would be adversely affected, which may result in future impairment. There is $76.3 million of goodwill in this reporting unit as of September 28, 2024.
Previous report
There are certain execution risks to our strategic plan. These execution risks, as well as the current market price of our common stock, result in the use of a relatively high discount rate in our discounted cash flow analysis. We will continue to monitor our reporting units and related goodwill for any possible future non-cash impairment charges.
Previous report
See Note 3 to the consolidated condensed financial statements for additional information.
Previous report
Gross profit margin decreased versus the prior fiscal quarter and the prior year periods. The decreases versus the prior fiscal quarter and prior year periods are primarily due to lower sales volume and decreased average selling prices. Costs associated with the Newport wafer fab also contributed to the decreases versus the prior period years.
Previous report
The segment operating margin decreased versus the prior fiscal quarter and the prior year periods. The decreases are primarily due to gross profit margin decreases.
Previous report
Average selling prices decreased significantly versus the prior year periods, and to a lesser extent versus the prior fiscal quarter.
Previous report
Gross profit margin decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter was primarily due to lower average selling prices. The decreases versus the prior year periods are primarily due to lower sales volume and lower average selling prices. Higher labor and logistics costs also contributed to the decreases versus the prior year periods.
Previous report
Segment operating margin decreased versus the prior fiscal quarter and the prior year periods. The decreases are primarily due to gross profit margin decreases.
Previous report
Average selling prices decreased versus the prior fiscal quarter and the prior year periods.
Previous report
Net revenues of the Optoelectronic Components segment increased versus the prior fiscal quarter, but decreased versus the prior year periods. The increase versus the prior fiscal quarter is due to increased sales to all end market customers and customers in all regions. The decrease versus the prior year quarter is primarily due to decreased sales to industrial end market customers and customers in the Europe and Americas regions. The decreases versus the prior year-to-date period is primarily due to decreased sales to distribution customers, all end market customers, and customers in the Europe and Americas regions.
Previous report
Gross profit margin decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter and the prior year quarter are primarily due to lower average selling prices and the negative impact of inventory reduction. The decrease versus the prior year-to-date period is primarily due to decreased sales volume, lower average selling prices, and increased inventory obsolescence.
Previous report
Average selling prices decreased versus the prior fiscal quarter and the prior year periods.
Previous report
We are now using our recently modernized and expanded wafer fab in Heilbronn, Germany.
Previous report
Net revenues of the Resistors segment increased slightly versus the prior fiscal quarter, but decreased significantly versus the prior year periods. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution customers mainly in Asia and automotive and military and aerospace end market customers. The decreases versus the prior year periods were due to decreased sales to nearly all end market customers and customers in all regions.
Previous report
Gross profit margin decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter is primarily due to lower average selling prices, increased labor costs, and increased materials costs. The decreases versus the prior year periods are primarily due to lower sales volume, lower average selling prices, increased labor costs, increased depreciation, and increased logistics costs.
Previous report
Segment operating margin decreased versus the prior fiscal quarter and the prior year periods. The decreases are primarily due to gross profit margin decreases.
Previous report
Average selling prices decreased versus the prior fiscal quarter and prior year periods.
Previous report
Gross profit margin was flat versus the prior fiscal quarter, but decreased versus the prior year periods. The decreases versus the prior year periods are primarily due to decreased average selling prices, higher logistics, materials, and labor costs, and start-up costs of a new manufacturing facility.
Previous report
Segment operating margin was flat versus the prior fiscal quarter, but decreased versus the prior year periods. The decreases are primarily due to gross profit margin decreases.
Previous report
Average selling prices were flat versus the prior fiscal quarter, but decreased versus the prior year periods.
Previous report
Gross profit margin decreased versus the prior fiscal quarter and the prior year-to-date period, but increased versus the prior year quarter. The decrease versus the prior fiscal quarter is due to lower sales volume, negative product mix, and increased utilities costs, partially offset by higher average selling prices. The increase versus the prior year quarter is due to improved production efficiencies and lower materials costs. The decrease versus the prior year-to-date period is due to lower sales volume, lower average selling prices, increased labor costs, higher material costs, and production inefficiencies.
Previous report
Segment operating margin decreased versus the prior fiscal quarter and the prior year-to-date period, but was flat versus the prior year fiscal quarter. The decreases are primarily due to gross profit margin decreases.
Previous report
On September 24, 2024, we announced a restructuring program designed, in part, to streamline business decision making. The programs are expected to generate annualized cost savings of approximately $12 million of selling, general and administration expenses, when the programs are fully implemented by the end of 2026. We expect SG&A expenses for the fourth fiscal quarter of 2024 to be approximately $126 million, reflecting SG&A cost savings realized from the program so far.
Previous report
Cash paid for property and equipment for the nine fiscal months ended September 28, 2024 was $175.2 million, as compared to $184.1 million for the nine fiscal months ended September 30, 2023. 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. To increase our internal capacity, we had planned to invest approximately $435 million in 2024. The industry recovery has been slower than expected. Accordingly, we adjusted our timetable for investments for our new 12-inch wafer fab in Itzehoe, Germany beyond 2024, and now expect total capital expenditures for 2024 to be between $360 million and $390 million. We remain committed to spending a total of $2.6 billion in total capital expenditures for the period 2023 - 2028.
Previous report
On August 15, 2024, we entered into an amendment to the credit facility that redefines the Interest Coverage Ratio to remove Capital Expenditures from the calculation, increases the minimum Interest Coverage Ratio to 3.25 to 1.00, increases the threshold of Indebtedness of Foreign Subsidiaries to the greater of $300 million and 15% of Consolidated Tangible Net Worth as of the last day of the fiscal quarter for which financial statements are delivered, and increases the threshold of Investments of Subsidiaries that are not Loan Parties to $300 million.
Previous report
Other significant terms and conditions of the credit facility have not been modified.
Reworded paragraphs (36)
Previous wording
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. 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. To increase our internal capacity, we had planned to invest approximately $435 million in 2024. The industry recovery has been slower than expected. Accordingly, we adjusted our timetable for investments for our new 12-inch wafer fab in Itzehoe, Germany beyond 2024, and now expect total capital expenditures for 2024 to be between $360 million and $390 million. We remain committed to spending a total of $2.6 billion in total capital expenditures for the period 2023 - 2028. We can adjust the timing of our capital expenditures and still fulfill our customer commitments because we now have intermediate capacity due to the qualification of a foundry partner and the acquisition of the Newport wafer fab.
Current wording
Our goal is to enhance 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. We have developed go-to-market strategies and are investing in and expanding the key product lines for growth that we have identified. 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.
Previous wording
We utilize several financial metrics, including net revenues, gross profit margin, operating margin, segment operating margin, 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 slightly in the third fiscal quarter of 2024 primarily due to the negative impacts of an on-going distributor inventory correction. Net revenues and margins decreased versus the prior year periods primarily due to lower sales volume. The restructuring expense recognized in the third fiscal quarter also negatively impacted operating margin.
Current wording
We utilize several financial metrics, including net revenues, gross profit margin, operating margin, segment operating margin, 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 were mixed versus the prior fiscal quarter, but mostly lower than the prior year period. Net revenues and margins decreased versus the prior year period primarily due to lower sales volume and decreased average selling prices, but orders increased.
Previous wording
Net revenues for the fiscal quarter ended September 28, 2024 were $735.4 million, compared to $741.2 million and $853.7 million for the fiscal quarters ended June 29, 2024 and September 30, 2023, respectively. The net loss attributable to Vishay stockholders for the fiscal quarter ended September 28, 2024 was $(19.3) million, or $(0.14) per share, compared to net earnings of $23.5 million, or $0.17 per diluted share for the fiscal quarter ended June 29, 2024, and $65.5 million, or $0.47 per diluted share for the fiscal quarter ended September 30, 2023.
Current wording
Net revenues for the fiscal quarter ended March 29, 2025 were $715.2 million, compared to $714.7 million and $746.3 million for the fiscal quarters ended December 31, 2024 and March 30, 2024, respectively. The net loss attributable to Vishay stockholders for the fiscal quarter ended March 29, 2025 was $(4.1) million, or $(0.03) per share, compared to a net loss of $(66.3) million, or $(0.49) per share for the fiscal quarter ended December 31, 2024, and net earnings of $30.9 million, or $0.22 per diluted share for the fiscal quarter ended March 30, 2024.
Previous wording
Our results have been negatively impacted by the distributor inventory correction that began in the fourth fiscal quarter of 2022 and continued through the third fiscal quarter of 2024. The long-term outlook for our business remains strong, although our results are weaker than our prior fiscal quarter and prior year results.
Current wording
For the past several quarters, orders were negatively impacted by a distributor inventory correction and channel inventory that overhung the market, but there are indicators that the prolonged period of excess inventory digestion is ending. The long-term outlook for our business remains strong, although our results are weaker than our prior year results.
Previous wording
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, 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.
Current wording
Our chief operating decision maker makes decisions, allocates resources, and evaluates business segment performance based on segment gross profit and 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, goodwill impairment charges, 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.
Previous wording
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 third fiscal quarter of 2023 through the third fiscal quarter of 2024(dollars in thousands):
Current wording
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 first fiscal quarter of 2024 through the first fiscal quarter of 2025(dollars in thousands):
Previous wording
(1) Operating margin for the third fiscal quarter of 2024 includes $40.6 million of restructuring and severance expenses (see Note 4 to our consolidated condensed financial statements).
Current wording
(1) Operating margin for the third fiscal quarter of 2024 includes $40.6 million of restructuring and severance expenses (see Note 2 to our consolidated condensed financial statements). Operating margin for the fourth fiscal quarter of 2024 includes $66.5 million of goodwill impairment charges.
Previous wording
Revenues decreased versus the prior fiscal quarter and the third fiscal quarter of 2023 primarily due to lower sales volume and lower average selling prices. The book-to-bill ratio increased slightly versus the prior fiscal quarter, but orders and backlog continued to be negatively impacted by the distributor inventory correction that continued in the third fiscal quarter of 2024. We continue to increase manufacturing capacity for critical product lines. Average selling prices decreased versus the prior fiscal quarter and prior year quarter.
Current wording
Revenues increased slightly versus the prior fiscal quarter, but decreased versus the prior year quarter. The increase versus the prior fiscal quarter is primarily due to higher sales volume, partially offset by lower average selling prices. The decrease versus the prior year quarter is primarily due to lower average selling prices and lower sales volume. The book-to-bill ratio and backlog increased versus the prior fiscal quarter. We continue to increase capacity for critical product lines. Average selling prices decreased versus the prior fiscal quarter and prior year quarter.
Previous wording
Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter primarily due to lower sales volume, decreased average selling prices, and increased depreciation expense. The impact of the Newport acquisition also contributed to the decrease versus the prior year quarter.
Current wording
Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter primarily due to lower average selling prices and higher fixed costs. Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year quarter.
Previous wording
The book-to-bill ratio in the third fiscal quarter of 2024 increased to 0.88 versus 0.86 in the second fiscal quarter of 2024.
Current wording
The book-to-bill ratio in the first fiscal quarter of 2025 increased to 1.08 versus 1.01 in the fourth fiscal quarter of 2024.
Previous wording
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 third fiscal quarter of 2023 through the third fiscal quarter of 2024(dollars in thousands):
Current wording
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 first fiscal quarter of 2024 through the first fiscal quarter of 2025(dollars in thousands):
Previous wording
Despite the distributor 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 versus the prior fiscal quarter and prior year quarter are primarily due to decreased sales volume and average selling prices.
Current wording
There are indications that the channel inventory that has overhung the market is normalizing and the prolonged period of excess inventory digestion is ending. 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 versus the prior year quarter is primarily due to lower average selling prices and decreased sales volume.
Previous wording
Gross profit margins for the fiscal quarter ended September 28, 2024 were 20.5%, versus 22.0% and 27.8%, for the comparable prior quarter and prior year period, respectively. Gross profit margins for the nine fiscal months ended September 28, 2024 were 21.8%, versus 29.6% for the comparable prior year period. Gross profit margin decreased versus the prior fiscal quarter primarily due to lower sales volume, decreased average selling prices, and increased depreciation expense. The decreases versus the prior year periods are primarily due to lower sales volume, decreased average selling prices, the impact of the Newport acquisition, and cost inflation.
Current wording
Gross profit margins for the fiscal quarter ended March 29, 2025 were 19.0%, versus 19.9% and 22.8% for the comparable prior fiscal quarter and prior year period, respectively. Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter primarily due to lower average selling prices and higher fixed costs. Costs associated with the Newport wafer fab also contributed to the decrease versus the prior year quarter.
Previous wording
Net revenues of the MOSFETS segment decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter is primarily due to decreased sales of Newport legacy products. The decreases versus the prior year quarter and prior year-to-date periods are primarily due to decreased sales to all end market customers and customers in all regions, partially offset by the Newport wafer fab acquisition.
Current wording
Net revenues of the MOSFETs segment decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to decreased sales to distribution and OEM customers, automotive and industrial end market customers, and customers in all regions. An increase in sales to computing end market customers partially offset the decreases versus the prior fiscal quarter and prior year quarter.
Previous wording
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% by 2028 and allow us to balance our in-house and foundry wafer supply.
Current wording
We continue to invest to expand mid- and long-term manufacturing capacity for strategic product lines. We are 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% by 2028 and allow us to balance our in-house and foundry wafer supply.
Previous wording
The acquisitions of MaxPower Semiconductor, Inc. and the Newport wafer fab, as well as the planned capacity expansions at Itzehoe and Newport, are long-term investments which were not expected to generate significant income or cash flows in the near-term, but should greatly enhance the long-term position of our MOSFETs business. Such investments have significantly increased the net asset base of our MOSFETs business without a corresponding increase in current income or cash flows. We continue to be committed to these long-term projects.
Current wording
We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022. We plan to use the Newport wafer fabrication facility acquired in the first fiscal quarter of 2024 as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities. The acquisitions of MaxPower Semiconductor, Inc. and the Newport wafer fab, as well as the planned capacity expansions at Itzehoe and Newport, are long-term investments which are not expected to generate significant income or cash flows in the near-term, but should greatly enhance the long-term position of our MOSFETs business. We remain committed to these long-term projects.
Previous wording
Net revenues of the Diodes segment decreased slightly versus the prior fiscal quarter and significantly versus the prior year periods. The decrease versus the prior fiscal quarter was primarily due to decreased sales to distribution customers and customers in the Europe and Americas regions. The decreases versus the prior year periods are due to decreased sales to nearly all end market customers and customers in all regions.
Current wording
Net revenues of the Diodes segment decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to decreased sales to OEM customers, automotive end market customers, and customers in the Asia and Americas regions. Increases in sales to distribution customers and customers in the Europe region partially offset the decrease versus the prior fiscal quarter.
Previous wording
Average selling prices increased versus the prior fiscal quarter, but decreased versus the prior year periods.
Current wording
Average selling prices increased versus the prior fiscal quarter.
Previous wording
Net revenues of the Capacitors segment decreased versus the prior fiscal quarter and the prior year periods. The decrease versus the prior fiscal quarter is primarily due to decreased sales to distribution customers, industrial end market customers, and customers in the Asia and Europe regions. The decrease versus the prior year quarter is primarily due to decreased sales to industrial and automotive end market customers and customers in the Europe region. The decrease versus the prior year-to-date period is primarily due to decreased sales to distribution customers, industrial and automotive end market customers, and customers in the Europe and Americas regions.
Current wording
Net revenues of the Resistors segment increased versus the prior fiscal quarter, but decreased versus the prior year quarter. The increase versus the prior fiscal quarter is primarily due to increased sales to distribution customers, industrial end market customers, and customers in the Asia and Europe regions. The decrease versus the prior year quarter is primarily due to decreased sales to OEM customers, industrial and automotive end market customers, and customers in the Europe region, partially offset by increased sales to distribution customers and customers in the Asia region.
Previous wording
Net revenues of the Inductors segment decreased versus the prior fiscal quarter, were flat versus the prior year fiscal quarter, and increased versus the prior year-to-date period. The decrease versus the prior fiscal quarter was primarily due to decreased sales to distribution and OEM customers, all end market customers, and customers in the Americas and Europe regions. The increase versus the prior year-to-date period is primarily due to increased sales to distribution customers, automotive and medical end market customers, and customers in all regions.
Current wording
Net revenues of the Inductors segment increased versus the prior fiscal quarter, but decreased versus the prior year quarter. The increase versus the prior fiscal quarter is primarily due to increased sales to OEM customers, automotive end market customers, and customers in the Europe region, partially offset by decreased sales to EMS customers and customers in the Asia region. The decrease versus the prior year quarter is primarily due to decreased sales to OEM customers, automotive and military and aerospace end market customers, and customers in all regions, partially offset by increased sales to medical end market customers.
Previous wording
Segment operating margin decreased versus the prior fiscal quarter and the prior year periods. The fluctuations are primarily due to gross profit margin decreases.
Current wording
Segment operating margin decreased versus the prior fiscal quarter and prior year quarter. The fluctuations are primarily due to gross profit decreases.
Previous wording
Selling, general, and administrative (“SG&A”) expenses are summarized as follows(dollars in thousands):
Current wording
Selling, general, and administrative expenses are summarized as follows(dollars in thousands):
Previous wording
The sequential increase in SG&A expenses is primarily attributable to higher stock-based compensation expense and higher research and development expenses, partially offset by lower bonus compensation. SG&A expenses increased versus the prior year periods due to higher stock-based compensation expense and general cost inflation.
Current wording
The sequential increase in SG&A expenses is primarily attributable to increased incentive compensation accruals.
Previous wording
Interest expense for the fiscal quarter ended September 28, 2024 decreased $0.1 million versus the fiscal quarter ended June 29, 2024 and decreased $0.6 million versus the fiscal quarter ended September 30, 2023. Interest expense for the nine fiscal months ended September 28, 2024 increased by $1.1 million versus the nine fiscal months ended September 30, 2023. The decrease versus the prior year fiscal quarter is due to lower average outstanding balances on the revolving credit facility. The increase versus the prior year-to-date period is due to the issuance of the convertible senior notes due 2030 in the third fiscal quarter of 2023.
Current wording
Interest expense for the fiscal quarter ended March 29, 2025 increased by $1.1 million versus the fiscal quarter ended December 31, 2024 and increased by $2.3 million versus the fiscal quarter ended March 30, 2024. The increases versus the prior fiscal quarter and the prior year quarter are due to higher outstanding balances on our revolving credit facility.
Previous wording
For the fiscal quarter ended September 28, 2024, our effective tax rate was 21.1%, as compared to 34.2% and 31.7% for the fiscal quarters ended June 29, 2024 and September 30, 2023, respectively. For the nine fiscal months ended September 28, 2024, our effective tax rate was 35.7%, as compared to 29.3% for the nine fiscal months ended September 30, 2023. We expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions.
Current wording
For the fiscal quarter ended March 29, 2025, our effective tax rate was 3.2%, as compared to (12.3)% and 29.0% for the fiscal quarters ended December 31, 2024 and March 30, 2024, respectively. We expect that our effective tax rate will be higher than the U.S. statutory rate, excluding unusual transactions, at higher levels of pre-tax income.
Previous wording
During the nine fiscal months ended September 28, 2024, the liabilities for unrecognized tax benefits decreased $0.2 million on a net basis, primarily due to statute expirations, partially offset by accruals for the current period.
Current wording
During the three fiscal months ended March 29, 2025, the liabilities for unrecognized tax benefits decreased by $1.0 million on a net basis, primarily due to the settlement of tax audits, partially offset by accruals for the current period.
Previous wording
Cash flows provided by operating activities were $106.0 million for the nine fiscal months ended September 28, 2024, as compared to cash flows provided by operations of $359.4 million for the nine fiscal months ended September 30, 2023.
Current wording
Cash flows provided by operating activities were $16.1 million for the three fiscal months ended March 29, 2025, as compared to cash flows provided by operations of $80.2 million for the three fiscal months ended March 30, 2024.
Previous wording
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 third fiscal quarter of 2023 through the third fiscal quarter of 2024:
Current wording
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 first fiscal quarter of 2024 through the first fiscal quarter of 2025:
Previous wording
Free cash flow for the nine fiscal months ended September 28, 2024 decreased versus the nine fiscal months ended September 30, 2023 primarily due to decreased net earnings and withholding taxes paid for the repatriation of cash to the U.S. 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.
Current wording
Free cash flow for the three fiscal months ended March 29, 2025 decreased versus the three fiscal months ended March 30, 2024 primarily due to decreased net earnings. 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.
Previous wording
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).
Current wording
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 condensed 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).
Previous wording
During the second fiscal quarter of 2024, we repatriated $120 million of accumulated earnings to the United States and paid withholding taxes in Israel of $15 million. As of September 28, 2024, $24.8 million of our cash and cash equivalents and short-term investments were held by our U.S. subsidiaries. Based on expected cash payments pursuant to our Stockholder Return Policy and funding of the Newport expansion, we expect to be in a net borrowing position in the U.S. before year-end 2024. As of September, 2024, we have approximately $513 million of German and Israeli earnings that are deemed not indefinitely reinvested. Based on the expected timing of future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $76 million, which has been accrued, but will only be paid upon repatriation of the unremitted earnings. Repatriating these unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense. We also have amounts of unremitted foreign earnings held by subsidiaries in countries other than Israel and Germany, which continue to be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions that would be incurred to repatriate these amounts. Certain of these subsidiaries are located in countries with restrictive regulations and high tax rates for repatriating cash. Due to the uncertainties associated with the ability, timing, and method to repatriate these unremitted earnings and other complexities associated with its hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but could be significant. Our substantially undrawn credit facility provides us with adequate operating liquidity in the United States.
Current wording
As of March 29, 2025, $12.7 million of our cash and cash equivalents and short-term investments were held by our U.S. subsidiaries. As of March 29, 2025, we are in a net borrowing position in the U.S. and we expect to continue to be at least throughout 2025, primarily due to Newport expansion funding requirements. As of March 29, 2025, we have approximately $535.8 million of German and Israeli earnings that are deemed not indefinitely reinvested. Based on the expected timing of future repatriations, we estimate that the tax liability to repatriate these unremitted earnings will be approximately $79.8 million, which has been accrued, but will only be paid upon repatriation of the unremitted earnings. Repatriating these unremitted earnings earlier than currently planned may not be possible and would incur additional tax expense. We also have amounts of unremitted foreign earnings held by subsidiaries in countries other than Israel and Germany, which continue to be reinvested indefinitely, that we have not accrued for the incremental foreign income taxes and withholding taxes payable to foreign jurisdictions that would be incurred to repatriate these amounts. Certain of these subsidiaries are located in countries with restrictive regulations and high tax rates for repatriating cash. Due to the uncertainties associated with the ability, timing, and method to repatriate these unremitted earnings and other complexities associated with its hypothetical calculation, determination of the amount of tax expense that would be incurred to repatriate the unremitted earnings is not practicable, but could be significant. Our undrawn credit facility provides us with adequate operating liquidity in the United States.
Previous wording
We were in compliance with all financial covenants under the credit facility at September 28, 2024. Our interest coverage ratio and net leverage ratio were 19.99 to 1 and 1.40 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections.
Current wording
We were in compliance with all financial covenants under the credit facility at March 29, 2025. Our interest coverage ratio and net leverage ratio were 12.96 to 1 and 2.47 to 1, respectively. We expect to continue to be in compliance with these covenants based on current projections. Based on our current EBITDA and outstanding revolver balance, the usable capacity on the credit facility is approximately $248 million.
Previous wording
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 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 2023 reduces the risk that the maturity date of the credit facility will accelerate. Subsequent to the end of the third fiscal quarter of 2024, we repurchased an additional $40.7 million principal amount of convertible senior notes due 2025. The repurchase was funded with a draw on our revolving credit facility.
Current wording
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 2030 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.
Previous wording
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 credit facility 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 1.99 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 1.85% (including the applicable credit spread), and the undrawn commitment fee is 0.30% per annum.
Current wording
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 credit facility 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 3.25 to 1, any new U.S. dollar borrowings will bear interest at SOFR plus 2.10% (including the applicable credit spread), and the undrawn commitment fee is 0.35% per annum.
Previous wording
We had no amount outstanding on our revolving credit facility at December 31, 2023 and September 28, 2024. We borrowed and repaid $58 million on the revolving credit facility during the nine fiscal months ended September 28, 2024. No amounts were outstanding on our revolving credit facility at any fiscal month-end. We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our 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.
Current wording
We had $136 million outstanding on our revolving credit facility at December 31, 2024 and $218 million outstanding at March 29, 2025. We borrowed $123 million and repaid $41 million on the revolving credit facility during the three fiscal months ended March 29, 2025. The average outstanding balance on our revolving credit facility calculated at fiscal month-ends was $187 million and the highest amount outstanding at a fiscal month end was $218 million during the three fiscal months ended March 29, 2025. We expect, at least initially, to fund certain future obligations required to be paid by the U.S. parent company by borrowing under our 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. Except for the maturity of $41.9 million of convertible senior notes due 2025, which will be funded by the revolving credit facility, no principal amounts of our debt are due until 2028.
Previous wording
The convertible senior notes due 2025 and due 2030 are not currently convertible. 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. 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. We have the intent and ability to finance the principal amount of the convertible senior notes due 2025 using borrowings under our credit facility upon maturity of the notes.
Current wording
The convertible senior notes due 2025 became convertible on December 15, 2024 and will remain convertible until maturity. The convertible senior notes due 2030 are not currently convertible. 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. 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. We have the intent and ability to finance the principal amount of the convertible senior notes due 2025 using borrowings under our credit facility upon maturity of the notes.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Average selling prices decreased versus the prior fiscal quarter and the prior year quarter.
Current report — wording carried from elsewhere
Gross profit margin decreased versus the prior fiscal quarter and the prior year quarter. The decreases are primarily due to lower average selling prices.
Current report — wording carried from elsewhere
Average selling prices decreased versus the prior fiscal quarter and the prior year quarter.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
We acquired leading edge silicon and silicon carbide MOSFETs products with our acquisition of MaxPower in the fourth fiscal quarter of 2022. We plan to use the Newport wafer fabrication facility acquired in the first fiscal quarter of 2024 as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities.
Previous report — wording carried elsewhere
We plan to use the Newport wafer fabrication facility acquired in the first fiscal quarter of 2024 as the home for MaxPower to further develop and scale our SiC MOSFETs and diodes capabilities.