Segment Information

9 Months Ended

Oct. 03, 2020

Segment Information [Abstract]

Segment Information

Note 12 – Segment Information

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.

The current six segment alignment reflects a change in reporting structure made during the fourth fiscal quarter of 2019.  The fiscal periods ended September 28, 2019 have been recast to separately present Resistors and Inductors.

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.  A small portion of revenues is from royalties.

The Company evaluates business segment performance on operating income, exclusive of certain items (“segment operating income”).  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 such selling, general, and administrative costs as 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 outbreak, goodwill and long-lived asset impairment charges, and other items.  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.

The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit.  The Company considers segment operating income to be the more important metric because it more fully captures the business operations of the segments.

The following tables set forth business segment information:

	MOSFETs		Diodes		Optoelectronic Components		Resistors		Inductors		Capacitors		Corporate / Other*			Total
Fiscal quarter ended October 3, 2020:
Net revenues	$	133,976	$	123,744	$	64,955	$	145,362	$	79,399	$	92,724	$	-		$	640,160
Gross profit	$	29,649	$	20,843	$	21,289	$	35,186	$	26,597	$	18,387	$	(242	)	$	151,709
Segment operating income	$	20,148	$	15,828	$	17,184	$	30,127	$	24,106	$	13,703	$	(242	)	$	120,854
Fiscal quarter ended September 28, 2019:
Net revenues	$	126,747	$	123,879	$	50,702	$	155,119	$	73,458	$	98,424	$	-		$	628,329
Gross profit	$	30,491	$	21,138	$	10,883	$	42,444	$	23,450	$	21,673	$	-		$	150,079
Segment operating income	$	21,018	$	16,420	$	6,923	$	36,900	$	20,797	$	16,675	$	-		$	118,733

Nine fiscal months ended October 3, 2020:
Net revenues	$	369,813	$	363,274	$	168,264	$	444,982	$	218,369	$	270,016	$	-		$	1,834,718
Gross Profit	$	84,779	$	65,265	$	47,602	$	112,472	$	69,836	$	53,960	$	(4,295	)	$	429,619
Segment Operating Income	$	56,408	$	50,064	$	35,818	$	96,891	$	62,129	$	39,297	$	(4,295	)	$	336,312
Nine fiscal months ended September 28, 2019:
Net revenues	$	392,930	$	433,761	$	171,939	$	509,309	$	222,122	$	328,667	$	-		$	2,058,728
Gross Profit	$	98,483	$	93,487	$	43,131	$	151,910	$	71,268	$	77,560	$	-		$	535,839
Segment Operating Income	$	70,237	$	78,558	$	30,655	$	134,914	$	63,213	$	62,402	$	-		$	439,979

*Amounts reported in Corporate/Other above represent unallocated costs directly related to the COVID-19 outbreak, which are reported as costs of products sold on the consolidated condensed statements of operations.

	Fiscal quarters ended						Nine fiscal months ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Reconciliation:
Segment Operating Income	$	120,854		$	118,733		$	336,312		$	439,979
Restructuring and Severance Costs		-			(7,255	)		(743	)		(7,255	)
Impact of COVID-19 on Selling, General, and Administrative Expenses		441			-			871			-
Unallocated Selling, General, and Administrative Expenses		(59,805	)		(60,450	)		(186,742	)		(194,472	)
Consolidated Operating Income	$	61,490		$	51,028		$	149,698		$	238,252
Unallocated Other Income (Expense)		(15,766	)		(6,846	)		(38,100	)		(23,234	)
Consolidated Income Before Taxes	$	45,724		$	44,182		$	111,598		$	215,018

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:

	Fiscal quarters ended				Nine fiscal months ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019
Distributors	$	325,695	$	317,385	$	980,703	$	1,097,365
OEMs		273,664		263,983		725,592		815,645
EMS companies		40,801		46,961		128,423		145,718
Total Revenue	$	640,160	$	628,329	$	1,834,718	$	2,058,728

Net revenues were attributable to customers in the following regions:

	Fiscal quarters ended				Nine fiscal months ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019
Asia	$	270,451	$	231,999	$	748,160	$	737,918
Europe		213,296		231,677		626,276		765,318
Americas		156,413		164,653		460,282		555,492
Total Revenue	$	640,160	$	628,329	$	1,834,718	$	2,058,728

The Company generates substantially all of its revenue from product sales to end customers in the industrial, automotive, telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets.  Sales by end market are presented below:

	Fiscal quarters ended				Nine fiscal months ended
	October 3, 2020		September 28, 2019		October 3, 2020		September 28, 2019
Industrial	$	209,473	$	205,670	$	651,461	$	738,043
Automotive		216,641		212,222		552,418		627,588
Telecommunications		27,845		34,409		91,033		132,251
Computing		51,032		47,923		151,974		143,675
Consumer Products		33,353		23,401		76,477		87,936
Power Supplies		29,112		31,103		86,482		90,704
Military and Aerospace		40,582		41,872		125,968		137,281
Medical		32,122		31,729		98,905		101,250
Total revenue	$	640,160	$	628,329	$	1,834,718	$	2,058,728