Vishay’s performance in 2016 demonstrated that the Company is back on track after a less satisfactory year 2015. Our focus on stockholder value continued in 2016. Our generation of “free cash” ($167 million in 2016 and over $100 million per year for the past 11 years) enhanced our ability to pay dividends and repurchase stock. Vishay declared quarterly dividends in February, May, August, and November of 2016. The dividend declared in February reflected a 4% increase over the previous quarter’s dividend.
In May 2016, Vishay announced a $100 million stock repurchase authorization. Vishay bought back 1.75 million shares for $23.2 million under the program in 2016. The stock buyback authorization, along with Vishay’s decision to increase the quarterly dividend, was a further expression of the Company’s commitment to enhance total stockholder return over the long term. It demonstrated our confidence in our long-term cash flows and strong balance sheet, as well as our ability to continue both to invest in the Company’s Growth Plan and return capital to stockholders.
Vishay remains in a strong position to grow through acquisitions. While we did not make any new acquisitions in 2016, we have continued to review and assess acquisition targets.
Vishay is a financially strong company with industry-leading products and good prospects for the future. Since the Company’s founding in 1962, it has been a technology leader. I am optimistic about 2017 and feel that, for Vishay, the best is yet to come.
I offer my sincere thanks to Vishay’s employees for their continuous high standards and dedication to the Company, and to our customers, vendors, strategic business partners, and stockholders for believing in Vishay.
Vishay had a relatively successful year in 2016. Supported by a generally friendly economic environment and through its own efforts, Vishay improved its financial performance year over year. Vishay generated “free cash” of $167 million, which represents its best performance in five years. This has traditionally been a bright spot for Vishay, which has consistently generated in excess of $100 million in “free cash” in each of the past 11 years.
In 2016, we were again able to offset the negative impact of inflation and price decline on the contributive margin through cost reduction and innovation. Also, the negative effect of inflation on our total fixed costs in COGS and SG&A was again compensated for by our general cost reduction programs and our specific restructuring activities. In 2016, we successfully completed our initial MOSFETs enhanced competitiveness program and then extended it.
In 2016, apart from proving our operational strength in pursuing and completing major operational targets such as tight control of fixed and variable costs, we also benefited from the revenue growth in the automotive and industrial segments in Asia. This growth was the result of our design wins over the last years as part of our Asia growth plan. We are confident that we will continue to grow in Asia in these key market segments and reap the benefits of our technical sales activities.
Vishay is well positioned to face upcoming challenges and take advantage of opportunities. We will continue our successful cost reduction programs, continue to grow organically, and remain on the lookout for targeted acquisitions.
I thank all Vishay’s employees, customers, vendors, strategic business partners, and stockholders for their support during 2016. I look forward to continued success in 2017.