Vishay Intertechnology, Inc.

Good morning and welcome to Vishay Intertechnology's fourth quarter and year 2020 conference call. With me today are Dr. Gerald Paul, Vishay's president and chief executive officer, and Laurie Lipkerman, our executive vice president and chief financial officer. As usual, we start today's call with the CFO who will review Vishay's fourth quarter and year 2020 financial results. Dr. Gerald Paul will then give an overview of our business and discuss operational performance as well as segment results in more detail. Finally, we'll reserve time for questions and answers. This call is being webcast from the Investor Relations section of our website at ir.vichet.com. The replay for this call will be publicly available for approximately 30 days. You should be aware that in today's conference call we will be making certain forward-looking statements that discuss future events and performance. These statements are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements. For discussion of factors that could cause results to differ, Please see today's press release and fiches Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. In addition, during this call, we may refer to adjusted or other financial measures that are not prepared according to generally accepted accounting principles. We use non-GAAP measures because we believe they provide useful information about the operating performance of our businesses and should be considered by investors in conjunction with gap measures that we also provide. This morning, we filed a form 8K that outlines the various variables that impact the diluted earnings per share computation. On the investor relations section of our website, you can find a presentation of the fourth quarter 2020 financial information Containing some of the operational metrics Dr. Paul will be discussing. Now, I turn the call over to Chief Financial Officer, Laurie Lipkerman.

Thank you, Peter. Good morning, everyone. I am sure that most of you have had a chance to review our earnings press release. I will focus on some highlights and key metrics. This year reported revenues for Q4 of $667 million. Higher than our original expectations, partially due to foreign currency effects. EPS was $0.26 for the quarter. Adjusted EPS was $0.28 for the quarter. During the quarter, we repurchased $2.6 million principal amount of our convertible debentures due to 2041 and recognized a U.S. gap loss on extinguishment. I will elaborate on these transactions in a few moments. COVID-19 continues to have an impact on our business. We see strong signs of recovery during Q4. Similar to the first three quarters of 2020, we have identified certain COVID-19 related charges, net of certain subsidies, which are directly attributable to the COVID-19 outbreak. These items were insignificant to Q2, Q3, and Q4 results, but are added back when calculating our non-GAAP adjusted EPS for comparability. Such measures exclude indirect impacts such as general macroeconomic effects of COVID-19 on our business and higher shipping costs due to reduced shipping capacity. Revenues in the quarter were $667 million, up by 4.2% from previous quarter and up by 9.4% compared to prior year. Gross margin was 22.8%. Adjusted gross margin, excluding COVID costs, was 22.9%. Operating margin was 9.0%. Adjusted operating margin excluding COVID costs was 8.9%. EPS was 26 cents. Adjusted EPS was 28 cents. EBITDA was 95.0 million or 14.4%. Adjusted EBITDA was 96.2 million or 14.4%. Revenues in 2020 were $2,502,000,000, down by 6.2% from previous year. Gross margin was 23.3%. Adjusted gross margin excluding COVID costs was 23.4%. Operating margin was 8.4%. Adjusted operating margin excluding COVID costs was 8.5%. EPS was $0.85. Adjusted EPS was $0.92 EBITDA was $352 million or 14.1% Adjusted EBITDA was $364 million or 14.6% Reconciling versus prior quarter adjusted operating income quarter for 2020 compared to adjusted operating income for prior quarter based on $27 million higher sales were 23 million higher, including exchange rate impacts. Adjusted operating income decreased by 2 million to 60 million in Q4 2020 from 61 million in Q3 2020. The main elements were average selling prices had a negative impact of 2 million, representing a 0.3% ASP decline. Volume increased with a positive impact of 10 million, equivalent to a 4% increase in volume. Variable costs increased with a negative impact of $4 million, primarily due to increased costs for freight, duties, and metals. Fixed costs increased with a negative impact of $5 million, primarily due to the acquisition and higher year-end repair and maintenance costs. Inventory impacts had a positive effect of $5 million. Exchange rates had a negative effect of $4 million. versus prior year adjusted operating income Q4 2020 compared to adjusted operating income in Q4 2019 based on 58 million higher sales or 44 million excluding exchange rate impacts, adjusted operating income increased by 19 million to 60 million in Q4 2020 from 41 million in Q4 2019. The main elements were Average selling prices had a negative impact of $19 million, representing a 2.8% ASP decline. Volume increased with a positive impact of $27 million, representing a 10.3% increase. Variable costs decreased with a positive impact of $9 million. Cost reductions and lower material prices, as well as improved manufacturing efficiencies, more than offset increases in labor and freight costs as well as metal prices. Fixed costs decreased with a positive impact of $2 million primarily due to lower travel costs which more than offset inflation. Inventory impacts had a positive effect of $4 million. Exchange rates had a negative effect of $5 million. 2020 versus 2019. Adjusted operating income for the year 2020 compared to adjusted operating income for the year 2019 based on 166 million lower sales or 180 million lower excluding exchange rate impact. Adjusted operating income decreased by 73 million to 2014 and 2020 from 287 in 2019. Average selling prices had a negative impact of 71 million Representing a 2.8% ASP decline Volume decreased with a negative impact of $53 million Representing a 4.2% decrease Variable costs decreased with a positive impact of $32 million Cost reductions and lower material prices As well as improved manufacturing efficiencies More than offset increases in labor and freight costs and metal prices Fixed costs decreased with a positive impact of $15 million primarily due to lower travel costs and general belt tightening, which more than offset wage inflation. Inventory impact had a positive effect of $8 million. Exchange rates had a negative effect of $5 million. Selling general and administrative expenses for the quarter were $92 million, which includes a net benefit of $0.6 million of subsidies in excess of identified COVID costs. Selling General and Administrative expenses for 2020 were $371 million, which includes a net benefit of $1.5 million of subsidies in excess of identified COVID costs. For Q1 2021, our expectations are approximately $103 million of SG&A expenses. The increase is primarily due to uneven attribution of stock compensation expense, incentive compensation accruals, and wage inflation, which are not completely offset by the impact of our restructuring program. For the full year, our expectations are slightly above $400 million at the exchange rates of Q4. This increase year-over-year is primarily due to the weakening of the U.S. dollar versus our relevant currency, increased travel costs anticipated in the second half of the year, and incentives, compensation accruals, and wage increases Not completely offset by the impact of our restructuring program. Based on our cost cycle, our SG&A expenses will be at the highest quarterly level in Q1. During the quarter, we were able to repurchase the final $3 million principal amount of our convertible debentures due 2041. Last Thursday, we completed the redemption of our convertible debentures due 2040. of which only 300K principal amount is outstanding. These actions complete the programs we have undertaken over the past three years to retire the convertible debentures due 2040, 2041, and 2042 which had certain tax attributes which were no longer efficient after U.S. tax reform. We continue to have a series of convertible notes outstanding which are due in 2025. While we did not repurchase any of our convertible notes During 2020, we opportunistically repurchased 135 million principal amounts of the convertible notes due 2025. The average repurchase price for the notes was 95.3% of base value. By reducing our fixed-term debt, the repurchase of the convertible notes provides us with future flexibility to better utilize our revolver and to adjust our debt levels as necessary. We continue to be authorized by our Board of Directors to repurchase up to an additional $65 million of convertible notes through 2025, subject to market and business conditions, legal requirements, and other factors. We had total equity of $1.5 billion at quarter end. Cash and short-term investments comprised $778 million. and the usable capacity on a credit facility is approximately $730 million. Debt at year-end is comprised primarily of the convertible notes due 2025. The principal amount or face value of the convert is $466 million. The carrying value of $395 million is net of unamortized discounts and debt issuance costs. There were no amounts outstanding on our revolving credit facility at the end of the year. However, we did utilize the revolver from time to time during Q4 to meet short-term financing needs and expect to continue to do so in the future. No principal payments are due until 2025, and the revolving credit facility expires in June 2024. DCHU will early adopt the new accounting standard for convertible debt effective January 1, 2021. Pursuant to the new standard, our convertible debt will no longer be bifurcated into debt and equity components, and we will no longer be required to amortize the related debt discount as non-cash interest expense. This means that our reported debt balance will increase to approximately the face value of the convert. It also means that our U.S. GAAP interest expense will decrease to approximate the cash coupons. We expect interest expense for Q1 to be approximately $4.4 million. The new standard also requires the application of the if-converted method for EPS share count, which would have added 14 million shares to our diluted EPS share count. In response to this, and consistent with our previously stated intention to net share settle, we amended the indenture for the convertible notes due 2025 requiring VCA to pay the principal amount of any converted notes in cash with any additional conversion value settled in shares of common stock. This results in a similar impact on the diluted share count to that which was achieved under the old standard when assuming that share settlement. Total shares outstanding at quarter end were 145 million. The expected share count for EPS purposes for the first quarter of 2021 is approximately 145 million. For a full explanation of our EPS share count and variables that impact the calculation, especially after the adoption of the new convertible debt standard, please refer to the 8K we filed this morning and our annual report on Form 10K, which will be filed in a few weeks. Our global cost reduction programs that were announced in mid-2019 have now been fully implemented with lower costs of approximately $15 million annually. The full-year effective tax rate on a GAAP basis was approximately 22%. The full-year normalized tax rate was approximately 21%. For the quarters, mathematically, the tax rate was approximately 19% for GAAP and approximately 11% normalized. Our year-to-date gap tax rate includes the unusual tax benefits related to the settlement of some of the convertible debentures from Q1 and Q4 and an adjustment to uncertain tax positions of $4 million in Q4. Our year-to-date normalized rate excludes the unusual tax items, as well as the tax effects of the pre-tax loss and extinguishment of debt, the identified COVID costs, and the Q2 restructuring charges. Our effective tax rate for the full year was lower than we expected at the end of Q3 due to changes in certain processes and business practices as we continue to adapt our financial and capital structure in response to U.S. tax reform. We expect our normalized effective tax rate for 2021 to be between 22% and 24%. Our consolidated effective tax rate is based on an assumed level and mix of income among our various taxing jurisdictions. A shift in income could result in significantly different results. Also, a significant change in tax laws or regulations could result in significantly different results. Cash from operations for the quarter was $126 million. Capital expenditures for the quarter were $53 million. Pre-cash for the quarter was $73 million. For the year, cash from operations was $315 million. Capital expenditures were $124 million with approximate length. For expansion, $83 million. For cost reduction, $9 million. For maintenance of business, $32 million. Pre-cash generation for the year was $192 million. The year includes $16 million cash taxes paid related to cash repatriation plus $15 million cash taxes paid for the current year installments of the U.S. Tax Reform Transition Tax. BC has consistently generated in excess of $100 million cash flows from operations in each of the past, now 26 years, and greater than $200 million for the last, now 19 years. Backlog at the end of quarter four was that $1,240,000,000, or 5.6 months of sales, Inventories increased quarter-over-quarter by $1 million, including an exchange rate impact. Days of inventory outstanding were 79 days. Days of sales outstanding for the quarter were 45 days. Days of payables outstanding for the quarter were 31 days, resulting in a cash conversion cycle of 94 days. Now I will turn the call over to our Chief Executive Officer, Dr. Gerald Kroll.

Thank you, Lori, and good morning, everybody. The year 2020 for Vishay and its business partners has been overshadowed by a completely new experience, a global pandemic. During the year, there were several phases of the pandemic impacting our business in very different ways. From numerous plant shutdowns, mainly in Asia, and temporary shortages of supply in the early part of the year, over drastic negative reactions of many customers, in particular in the automotive segment in the second quarter, to an extremely steep and broad recovery of orders since October. Vishay managed to adapt to a fast-changing economic environment fairly well, keeping up efficiencies, minimizing fixed costs, controlling inventories, and capping. Vishay in 2020 achieved a gross margin of 23.3% of sales versus 25.2% in 2019. An adjusted gross margin of 23.4% of sales versus 25.2%. Operating margin of 8.4% of sales versus 9.8% in 2019. and adjusted operating margin of 8.5% versus 10.7% in 2019. Earnings per share of 85 cents versus $1.19 in 2019 and adjusted earnings per share of 92 cents versus $1.26 in 2019. The generation of free cash also in 2020 remained on a quite excellent level. We in 2020 generated free cash of 192 million, which includes taxes paid for cash repatriation of 16 million. The fourth quarter, while benefiting from an accelerated economic recovery, suffered from higher than expected freight costs and middle prices. The US dollar weakened versus practically all currencies in which we just incur costs but achieve no sales. We share in the fourth quarter achieved gross margin of 22.8% of sales versus 23.7% in Q3. Adjusted gross margin of 22.9% versus 23.7% in Q3. Operating margin of 9.0%. and many more. The economic environment for electronics in general can be expressed as friendly to booming. The pandemic even raises consumption in several market segments and automotive came back to the full extent. There is some economic recovery was already seen in the third quarter, but now it is developed quite drastically in the course of the fourth quarter. in particular distribution contributed and continues to do so, also driven by some anxieties concerning potentially upcoming shortages of supply. We have realized reduced price pressure across the board and lead times in general are stretching out. All regions enjoyed growth in the quarter, led by automotive and distribution in Europe, There is a strong, continued, broad performance in Asia, and growth is also in the Americas to be seen, despite the weakness of oil and gas and commercial avionics. Global distribution currently is very confident concerning the short and mid-term business outlook. In fact, there is growing nervousness concerning the availability of components, in particular of semiconductors. In the year 2020, POS of global distribution was 3% below 2019, mainly due to a very weak second quarter. POS in Q4 2020, on the other hand, was 4% over prior quarter and 9% over prior year. POS in Q4 was strong in particular in Asia with 9% above prior quarter whereas in Europe and in America POS remained virtually on the levels of the third quarter. Distribution inventories in the fourth quarter came down again by 24 million. Inventory turns of global distribution increased to 3.1 from 2.8 in prior quarter. In the Americas, 1.6 turns. After 1.5 in Q3 and 1.4 in prior year. In Asia 5.0 after 4.3 in Q3 and 3.3 in prior year. In Europe 3.2 after 3.0 in Q3 and 2.8 in prior year. What can be stated is that Asian distribution has a very low inventory level currently. Coming to the industry segments, continued strong orders come from automotive as OEMs attempt to recoup volume lost during the second quarter closures. Production volumes of light vehicles are approaching pre-corona levels, but the electronic content has grown and continues to do so. Advanced driver assist systems 48V hybrid systems, autonomous driving and in particular electric vehicle charging programs boost the volume. Industrial continues to provide major growth opportunities despite the present weakness of the oil and gas sector. Industrial automation, new power generation and transmission systems as well as increased residential development propel growth. The market for computers and related products remains remarkably strong, driven by continued demand for tools to support global work-from-home trends. The AMS sector continues to be burdened by an extremely weak market for commercial avionics. We remain there. For telecom, we, for the mid-term, continue to expect a major upswing. In the context of the introduction of 5G, more short-term 4G systems will continue to grow. Quarantine restrictions favor consumer products in general, and medical continues to show stable growth. Let me comment on our business in the fourth quarter in particular. due to a high demand from distribution Q4 sales excluding exchange rate impacts came in slightly above the upper end of our guidance. We achieved sales of 667 million versus 640 million in prior quarter and 610 million in prior year. Excluding exchange rate effects, sales in the fourth quarter were up by 23 million or by 4% versus prior quarter and up versus prior year by 44 million or by 7%. Sales in the year 2020 were 2.502 billion versus 2.668 billion in 2019, a decrease of 7% excluding exchange rate effects. The book to bill ratio in the fourth quarter, may I say, jumped really, to 1.44 from 0.99 in Q3, mainly driven by Asian distribution. 1.89 book bill for distribution after 0.99 in Q3, 0.96 for OEMs after 101 in Q3, 1.61 for semiconductors after 0.98, 1.27 for Passage after 1.0, 1.15 for the Americas after 0.92 in Q3, 1.75 for Asia after 1.04 in Q3, and finally 1.27 for Europe after 1.01 in Q3. Backlock in the fourth quarter climbed to an extreme high of 5.6 months after 4.3 in quarter three, six months in semis after 4.3 in the third quarter, and 5.2 months in passes after 4.4. There is further decrease in price pressure, 0.3% prices down versus prior quarter and 2.8% down. versus prior year. In semis, there is less price pressure due to the current high demand. Minus 0.2% prices versus prior quarter, minus 3.9% versus prior year. Passives price decline is on normal levels, 0.5% down versus prior quarter and minus 1.7% versus prior year. Some comments on operations. In 2020, we were not completely able to offset the normal negative impacts on the contributive margin by cost reduction and by innovation, despite good manufacturing efficiencies. During the year, we suffered from increasing transportation costs, increasing metal prices, and, in particular in the fourth quarter, from the impact of a weakening U.S. dollar. Adjusted SG&A costs in the fourth quarter came in at 93 million, 2 million below expectations when excluding exchange rate effects. Adjusted SG&A costs for the year 2020 were at 373 million, 15 million or 4% below prior year at constant exchange rates, mainly due to less travelling and general belt tightening. Manufacturing fixed costs in the fourth quarter came in at $133 million, in line with expectations when excluding X-rate effects. Manufacturing fixed costs for the year 2020 were $513 million flat versus prior year at constant exchange rates. Total employment at the end of 2020 was 21,555, 4% down from prior year. Excluding exchange rate impacts, inventories in the quarter remained virtually flat. Inventory returns in the fourth quarter improved to 4.6 from 4.4 in prior quarter. In the year 2020, inventories were flat versus prior year. Inventory returns for the entire year 2020 were at a very satisfactory level of 4.3, no change to prior year. Capital spending in 2020 was 124 million versus 157 million in prior year, 83 million for expansion, 9 million for cost reduction, and 32 million for maintenance of business. Some acceleration vis-à-vis previous expectations of programs had been required in view of the sharply increasing orders. For 2021, we expect increased capex of about $175 million required to fulfill a stronger demand. Concerning cash flow, we generated in 2020 cash from operations of $315 million including $16 million cash taxes for cash repatriation compared to $296 million We generated in 2020 free cash of $192 million, including $16 million cash taxes for cash repatriation, compared to a free cash generation of $140 million in 2019, including $38 million cash taxes for cash repatriation. I think we can say that Vichy also in a year of an unprecedented economic destabilization has continued to live up to its reputation as an excellent and reliable producer of free cash. Let me go through our main product lines and I start as always with resistance. With resistors we enjoy a very strong position in the auto-industrial, mill and medical market segments. We offer virtually all resistor technologies. Vichay's traditional and historically growing business in the second quarter had suffered substantially from the weakness, especially in automotive, but now is in process of a fast recovery. Sales in the fourth quarter were $161 million, up by $15 million or by 10% versus prior quarter, and up by $8 million or 5% versus prior year, all excluding exchange rate impacts. Sales in 2020 of $606 million were down by $56 million or by 8% versus prior year, again excluding exchange rate impacts. Book-to-bill in the fourth quarter for resistors was 1.24 after 1.06 in prior quarter. And backlog for resistors increased from 4.5 months to 4.9 months. Due to higher volume, gross margin in the quarter increased to 26% of sales from 24% in prior quarter. Gross margin for the year 2020 was at 25% of sales, down from 28% in 2019 due to still lower volume. Inventory returns in the fourth quarter were at 4.5. Inventory returns for the full year were at a good level of 4.1. Low price decline for resistors, minus 0.1% versus prior quarter and minus 2% versus prior year. The acquisition ATP is in process to be integrated, and we do expect a successful year 2021 based on more volume and on an even higher focus on specialty products. Coming to inductors, the business consists of power inductors and magnetics. Since years, our fast-growing business with inductors represents one of the greatest success stories of Vichay. Exploiting the growing need for inductors in general, Vichay developed a platform of robust and efficient power inductors and leads the market technically. With magnetics, we are very well positioned in specialty businesses, demonstrating steady growth. Sales of inductors in Q4 were at 75 million, down by 4 million or 6% versus prior quarter, and down by 2 million or 3% versus prior year, excluding exchange rate impacts. Sales in 2020 of 294 million were slightly down versus prior year by 6 million or by 2%, again excluding exchange rate impacts. The temporary slowdown of automotive in 2020 also had an impact on the growth of inductors. Book-to-bill in Q4 for inductors was 1.03 after 0.96 in prior quarter. The backlog is at 4.6 months after 4.3 months in prior quarter. Gross margin in the quarter was at 30% of sales down versus prior quarter which was at 34% of sales but this has been a record. Exchange rate and higher transportation costs burdened the performance in the fourth quarter to a degree. Gross margin for the year 2020 was at excellent 32% of sales, virtually on the same level as in prior year. Inventory returns in the quarter were at a very high level of 5.0 as compared to 4.6 for the whole year. We plan for some inventory additions for supporting service. There is some price pressure, predominantly at power inductors, minus 1.7% versus prior quarter and minus 3.6% versus prior year. We continuously expand our manufacturing capacities for power inductors and we do expect to return to traditional growth rates in 2021 and ongoing financial success with our Induct Alliance. Coming to Capacitors. Our business with Capacitors is based on a broad range of technologies with a strong position in American and European market niches. We enjoy increasing opportunities in the field of power transmission and of electrocars, namely in Asia, especially in China. Sales in Q4 were 92 million, 2% below prior quarter, and 6% below prior year, which excludes exchange rate effects. Year-over-year capacitor sales decreased from 423 million in 2019 to 362 million in 2020, or by 15% at constant exchange rates. This was strongly impacted by delays of governmental projects and by a non-repetition of a specific 2019 program. Two things came together. Book-to-bill ratio in quarter four was 1.54 after 0.95 in the previous quarter. We received now a large order of large orders for power capacitors from China. The backlog increased Substantially to 6.2 months from 4.4 months into 3. Gross margin the quarter was at 18% of sales, down from 20% mostly due to a less favorable mix. Gross margin for the year 2020 was at 19% of sales, down from 22% in 2019 due to lower volumes. Inventory returns in the quarter increased to 3.8 as compared to 3.6 for the whole year. Prices were stable, minus 0.2% versus prior quarter and plus 0.4% versus prior year. We do expect increased volume and better profitability in 2021. Opto products. Vishay's business with OptoProducts consists of infrared emitters, receivers, sensors and couplers, as well as of LEDs for automotive applications. The business in 2020 experienced a significant recovery from disappointing results in prior year that had been burdened by major corrections in the supply chain. Currently, we see a really sharp increase in demand. Sales in the quarter were 68 million, 5% above prior quarter, and 29% above prior year at constant exchange rates. Year-over-year sales with Opto products went up from 223 million to 237 million, or by 5% when excluding exchange rate effects. Book-to-bill in the fourth quarter was 1.46%. and the backlog increased substantially to 5.9 months after 4.6 in the third quarter. Gross margin in the quarter came in at satisfactory 28% of sales after 33% in the third quarter, which had been a spike. Gross margin for the year 2020 recovered to a level of 28% of sales, as compared to 24% in prior year, which had been depressed primarily due to low volume. Very high inventory returns of 6.0 for Opto products in Q4 as compared to 5.5 in the year 2020. Prices were fairly stable. In fact, 1.2% up versus prior quarter and minus 1.1% versus prior year. We remain confident that optoproducts going forward will contribute noticeably to our growth and we are in process to modernize and expand our high-prone fat here in Germany. Coming to diodes, diodes for Vishay represents a broad commodity business where we are largest supplier worldwide. Vishay offers virtually all technologies as well as the most complete product portfolio. The business has a very strong position in the automotive and industrial market segments and keeps growing steadily and profitably since years. Diodes for a few quarters had suffered from too high inventory levels in the supply chain and from the weakness of its main markets. Now the business has entered a phase of strong recovery. We currently see a fairly dramatic upturn in demand. Sales in the quarter were $139 million, up by $15 million or by 12% versus prior quarter, and up by $14 million or 11% versus prior year, which includes exchange rate effects. Year-over-year sales with diodes decreased still from $557 million to $503 million a decline of 10% at constant exchanges. Book-to-bill ratio in Q4 climbed abruptly to 1.65 after 1.05 in the third quarter. Backlog increased to 6.2 months from 4.7 months in prior quarter. Gross margin in the quarter improved to 18% of sales as compared to 17% in the third quarter. Gross margin in the year 2020 was at 18% of sales, down from 20% in prior year due to substantially lower volume. Inventory returns increased to 4.8 as compared to 4.4 for the whole year. We see a reduced price pressure, stable prices, plus 0.2 really, versus prior quarter and minus 3.2. 7% versus tri-linear. We expect profitability of diodes to return to more historical levels with increasing volume. MOSFET. Vishay is one of the market leaders in MOSFET transistors. With MOSFETs we enjoy a strong and growing market position in automotive, which in view of an increased use of MOSFETs in automotive will provide a successful future. We currently experience, like in diodes, a quite dramatic increase in demand. Sales in the quarter were 132 million, 2% below prior quarter, but 12% above prior year at constant exchange rates. Year-over-year sales with MOSFETs decreased slightly from 509 to 501 million by 2%, excluding exchange rate impacts. Book-to-bill went up sharply. to 1.64 in the quarter after 0.93 in Q3. Backlogs climbed to 5.7 months as compared to 3.7 months in the third quarter. Gross margin in the quarter was at 22% of sales, no change from prior quarter. Gross margin in the year 2020 came in at 23% of sales, a reduction from 25% in 2019 due to a combination of higher metal prices and inventory reduction. Inventory returns in the quarter were 4.3 as compared to 4.0 for the entire year. Price decline is relatively normal, minus 1.2% versus prior quarter, minus 5.6%. versus prior year, but given the high market demand, we expect prices to stabilize going forward. MOSFETs in general remain key for VCA's growth going forward. Let me summarize. I think there is no need to emphasize that 2020 has been a year of unprecedented challenges for the people globally, for the economy in general, and naturally also for Vishay. Nevertheless, the following should be highlighted. Electronic components continue their success story also during difficult times. Vishay is a remarkably stable enterprise that reacts quickly and professionally to changes, that has a viable business model, and pursues its strategies also during times of severe challenges. We remain excited about the fairly overwhelming opportunities electronics increasingly will enjoy in the future. Vichy is prepared to participate to the full extent. Fortunately, concerning the pandemic, there is light at the end of the tunnel and we Despite still existing obstacles, expect a strong year, 2021. For the first quarter, we at Q4 exchange rates guide to a sales range between 7.05 million and 7.45 million at a gross margin of 25.0% of sales, plus minus 60 basis points. Thanks for your patience.