After a successful performance in 2016, Vishay had an even better year in 2017. Our success during 2017 was driven by favorable economic conditions in all regions. We demonstrated our confidence in our strong long-term cash flow generation and strong balance sheet by authorizing a $150 million stock buyback program, of which we spent approximately $40 million in 2017. We also increased our quarterly cash dividend. These actions reflected continued confidence in our ability to enhance total stockholder return over the long term and our commitment to doing so.
Vishay declared quarterly dividends in February, May, August, and November 2017. The dividend of $0.0675 declared in November reflected an 8% increase over the previous quarter’s dividend.
In February 2017, Vishay appointed Mr. Raanan Zilberman to its Board of Directors. Raanan offers significant business experience to our Board, particularly in light of his leadership experience as CEO of several organizations with international operations and reach. Raanan also brings to the Board familiarity with the Vishay organization because of his tenure, from 2002 through 2004, as President of the Vishay Transducers business following Vishay’s acquisition of Tedea Huntleigh.
During the 56 years since Vishay was founded in 1962, advances in technology have had a profound impact on society. Our smartphones are also computers that can outperform the large mainframe machines that were used in 1962. Complex electronic control systems in automobiles manage practically all key functions. Meanwhile, Internet of Things technology is in the process of changing the face of manufacturing and commerce.
One thing that has not changed over the years is Vishay’s position as a technology leader, especially in the automotive and industrial growth markets. Our components are used in virtually all major market sectors. Vishay has remained an industry leader because it has remained strong and continued to innovate.
As I look forward to continued success in 2018 and beyond, I thank all Vishay employees for their commitment to the company. I also thank our customers, vendors, strategic business partners, and stockholders for their confidence and support.
During the course of 2017, Vishay sales and profits increased significantly, making the year a very successful one for the Company. We experienced a high level of demand for our components in virtually all market segments. With its performance driven by increased sales volume, Vishay clearly demonstrated its ability to leverage its business model. We increased manufacturing capacities for key product lines, and continue to do so, mainly by pulling forward certain programs of our five-year Growth Plan. Another positive achievement was Vishay’s generation of “free cash,” which continued to be excellent. In 2017, Vishay generated “free cash” of $200 million, our best performance in six years.
During the year, business conditions in all regions significantly exceeded our expectations. This is especially true for our key markets, automotive and industrial. Market demand exceeded available capacity in several of our product lines, which led to stretched lead times and increased backlogs. Asian markets were very strong, particularly for industrial equipment, energy infrastructure, and automotive equipment. European manufacturers in the automotive and industrial segments were able to capitalize on their traditional strengths. During the course of the year, business conditions in American markets improved steadily.
We are excited about the opportunities that accelerated market growth offer Vishay, especially in automotive and industrial applications.
The stock repurchase authorization announced by Vishay in August 2017 demonstrated our confidence in our long-term cash flow and strong balance sheet. It clearly showed that we are able to continue to invest in our Growth Plan and return capital to stockholders.
In 2017, we were once again able to offset the negative impact of inflation and price decline on our contributive margin through cost reduction and innovation.
Over the years, Vishay has consistently done well during both upturns and downturns in the global economy. Regardless of short-term trends, and whatever 2018 might bring, I am confident that Vishay will continue on a positive course. With that in mind, I thank all Vishay’s employees, customers, vendors, strategic business partners, and stockholders for their faith in Vishay.