Prompt:
Human: Our hearts go out to all those affected by the COVID-19 pandemic.
We are inspired by the healthcare providers, the first responders, the ingenuity of our communities, businesses and governments.
We commenced business operations more than 20 years ago, intent on protecting and serving our consumers in their most critical time in some of the most challenging coastal areas in the United States for natural disasters.
We have remained highly proficient and steadfast in that commitment.
We entered this critical time in a position of strength with a debt-to-equity ratio of less than 2%.
And currently accruing more reserves than at any point in the company's history and with a highly experienced rapid response disaster team.
We are off to a good start in 2020 with solid first quarter results, including an annualized return on average equity of 16.1% and progress on our reinsurance renewals for June 1.
In this dynamic environment, we continue to support our consumers whether they are shopping for new policies, submitting claims, refinancing or extending terms, while having substantially all of our employees in our rapid response virtual protocol.
On those last two points, I would like to highlight the following.
First, since March 15, we have extended favorable terms to consumers of all states upon request.
Secondly, around the same mid-March time frame, we implemented our rapid response virtual protocol, which included outfitting employees with remote capabilities and enhancing our consumer outreach via virtual solutions.
In addition, we have accelerated the use of our virtual inspection software and trained an additional 100 employees on the application.
We have utilized various virtual tools to continue to attend appraisals, mediations and depositions.
All of our continuous improvement training has been uninterrupted through the use of Microsoft teams, led by our learning and development organization.
Most importantly, we continued to accelerate the use of virtual desk adjusting when appropriate.
And for the claims that cannot be adjusted virtually, we recognize the increased hardship placed both on the consumer and our field staff.
So as an essential business, we have outfitted our adjusters with the appropriate personal protective equipment.
We do not have exposure to many lines of business directly impacted by COVID-19.
But we continue to monitor the currently unknowable longer tail impacts to the housing and rental markets.
We believe we remain well positioned for 2020 and remain resolute in serving our consumers and creating value for our stakeholders.
As a reminder, discussions today on adjusted operating income and adjusted earnings per share are on a non-GAAP basis and exclude effects from unrealized and realized gains and losses on investments, and extraordinary reinstatement premiums and related commissions.
Adjusted operating income also excludes interest expense.
EPS for the quarter was $0.61 on a GAAP basis and $0.79 on a non-GAAP adjusted earnings per share basis.
Direct premiums written were up 15.7% for the quarter, led by strong direct premium growth of 19% in other states and 15% in Florida.
Net premiums earned were up 5.3% for the quarter, reflecting an increase in direct premiums earned offset by increased costs for reinsurance.
On the expense side, the combined ratio increased seven points for the quarter to 94.1%, driven primarily by increased losses in connection with the continued diversification in the company's underlying business to states outside of Florida, an increase in core loss pick for 2020, an increase in prior year adverse development, partially offset by a lower level of weather events in 2020 and a small reduction in the expense ratio.
Total services revenue increased 25.6% to $15.3 million for the quarter, driven primarily by commission revenue earned on ceded premiums.
On our investment portfolio, net investment income decreased 16.1% to $6.8 million for the quarter, primarily due to significantly lower yields on cash and short-term investments during the first quarter of 2020 when compared to the first quarter of 2019.
The prior year also includes onetime income benefits from a special dividend received and a onetime reduction in investment expenses.
The company continually monitors the Federal Reserve actions, which has impacted effective yields on new fixed income and overnight cash purchases.
During March of this year, as a result of the COVID-19 pandemic, we saw extreme instability in the fixed income market prior to the Federal Reserve, providing liquidity into that market.
As a result of the instability, we had a decline in the amount of unrealized gains in our fixed income portfolio, which affected the balance sheet only.
That said, we still ended the quarter with an overall unrealized gain in our fixed income portfolio of $15.4 million, which has further improved subsequent to the end of the first quarter.
To be clear, the impact COVID-19 had during the first quarter on debt and equity markets affected our book value per share by approximately $0.45, made up of approximately $0.27 related to the balance sheet-only impact from the decline in the amount of unrealized gains in our fixed income portfolio with the remainder being attributable to the effect of unrealized losses on our equity securities reflected in the P&L and consequently in retained earnings.
With the exception to these factors, our book value per share growth would have been enhanced in the quarter.
The credit rating on our fixed income securities was A plus at the end of the first quarter with a duration of 3.6 years, which we feel gives us a strong foundation to weather the current market conditions.
Unrealized losses on our equity securities were, again, driven by market volatility related to the COVID-19 pandemic, resulting in an unfavorable outcome for the quarter.
In response to the pandemic, the Board's Investment Committee has approved measures to continue building our portfolio's cash position to preserve capital for both risks and opportunities.
In regards to capital deployment, during the first quarter, the company repurchased approximately 312,000 of UVE shares at an aggregate cost of $6.6 million.
On April 16, 2020, the Board of Directors declared a quarterly cash dividend of $0.16 per share payable on May 21, 2020 to shareholders of record as of the close of business on May 14, 2020.
As we have done every quarter since Hurricane Irma made landfall, I would like to start with some additional color on past cat events, then talk briefly about 1Q weather and lastly, provide an update on our June one reinsurance placement efforts.
On past cat events, we continue to make progress in resolving the remaining open claims and, of course, handling the newly reported claims as quickly as possible.
Our in-house claims and legal staff continue to deliver day in and day out for our company and for our reinsurance partners as we approach the finish line on these cat events.
As of 3/31, Hurricanes Matthew and Florence, each were approaching single-digit open claims and are very near the end.
Hurricane Michael had approximately 200 open claims and continues to be booked at the same $360 million as year-end.
On Hurricane Irma, despite the fact that new claims continued to be reported throughout the first quarter, we still successfully reduced the remaining open claim countdown to below 600.
As we prepare for the 3-year statute of limitation for filing new Irma claims, we elected to add another $50 million of IBNR to this event.
This brings our booked ultimate to $1.45 billion at 3.31%.
As a reminder, at this point in the life cycle of Hurricane Irma, the vast majority of any increase in ultimate is covered by the Florida Hurricane Catastrophe Fund.
However, booking this level of additional IBNR did result in some net exposure as outlined in our release.
Turning now to 1Q weather.
For the most part, 1Q weather for us was within plan.
However, we continue to closely monitor two smaller cat events, one occurring in mid-January, impacting us, primarily in Georgia and Alabama; and a second occurring in early February and impacting us, primarily in Florida and the Carolinas.
As noted in our release, we have added an additional $1 million to accident year 2020 losses as we monitor these events.
As a reinsurance update, over the course of the past several months, we've met with nearly all of our reinsurance partners to discuss our upcoming June one reinsurance renewal.
As you might imagine, most of these meetings were forced to be conducted virtually, but the reinsurance market, overall, was very receptive and appreciative of the time and effort put forth to be able to share our message and answer their questions directly.
As is our normal practice from a timing perspective, we have already begun securing the necessary catastrophe capacity to be effective at June 1.
It goes without saying that the impacts of COVID-19 are being felt by many of our longtime reinsurance partners, and we could not be more appreciative of their professionalism in the face of this challenge.
While we all might like to press pause on this reinsurance renewal, that is unfortunately not an option.
We will not be sharing any pricing specifics today as the negotiations are still in progress.
However, I do feel it important to provide a few high-level comments on the overall status of our core first event reinsurance tower for this year.
As we disclosed during our year-end earnings call, with capacity already locked in via the Florida Hurricane Catastrophe Fund and multiyear deals, we stood at over 75% of our desired core first event reinsurance tower complete.
The market pricing for the remaining capacity has already been sent into the worldwide catastrophe reinsurance market for its proper subscriptions.
And since last week, we have already been receiving authorizations from our reinsurance partners for the June 1, 2020 program.
As of today, the percentage complete is approaching 90%, so we are well on our way.
 Assistant:

Chosen response:
compname reports q1 earnings per share $0.61.
q1 gaap earnings per share $0.61.
q1 adjusted non-gaap earnings per share $0.79.


Prompt:
Human: Our third quarter results, reported yesterday, demonstrate continued execution of our multiyear strategic priorities, including disciplined growth and operational improvements.
Our direct premiums earned growth of 15% in the third quarter was primarily driven by primary rate increases in Florida earning through the book.
We have now filed for more than 34% in primary rate increases in Florida over the past 18 months while simultaneously continuing to shape our underwriting risk with total policies in force relatively flat year-over-year.
Our business expenses were lower from continued expense management controls, including lower agency commissions and employee productivity gains, in addition to lower executive compensation accruals.
These results were highlighted by a 16.4% annualized return on average equity in the quarter.
As a reminder, discussions today on adjusted operating income and adjusted earnings per share are on a non-GAAP basis and exclude effects from unrealized and realized gains and losses on investments and any extraordinary reinstatement premiums and related commissions.
Adjusted operating income also excludes interest expense.
We ended the third quarter with total revenue down 7.8% to $287.3 million, driven primarily by the realized gain on investments of $53.8 million in the third quarter of the prior year versus a $4.3 million realized gain in the current quarter.
Direct premiums earned were up 15% for the quarter, led by primary rate increases in Florida and other states earning through the book as policies renew.
EPS for the quarter was $0.64 on a GAAP basis and $0.63 on a non-GAAP adjusted basis, driven by a combined ratio improvement of 36.1 points for the quarter to 98.6%.
The improvement was driven by a 30.9 point improvement in the net loss and LAE ratio from decreased weather events and lower prior year's reserve development, partially offset by current year strengthening and higher reinsurance costs impact on the ratio.
The expense ratio improved 3.7 points on a direct premiums earned basis due to continued focus on operating efficiencies, as Steve mentioned in his remarks.
On a net basis, the expense ratio improved 5.2 points for the quarter.
On our investment portfolio, we saw our net investment income decrease 38.6% to $2.8 million, and our realized gains decreased 92% to $4.3 million for the quarter.
Both decreases are the result of the sale and subsequent reinvestment at lower yields of a majority of securities in the portfolio that were in an unrealized gain position in the third and fourth quarters of 2020 to recognize the fair value benefits in surplus.
In regards to capital deployment, during the quarter, the company repurchased approximately 101,000 shares at an aggregate cost of $1.4 million.
The company's current share repurchase authorization program has $17.8 million remaining as of September 30, 2021, and runs through November 3, 2022.
On July 19, 2021, the Board of Directors declared a quarterly cash dividend of $0.16 per share of common stock, which was paid on August 9, 2021, to shareholders of record as of the close of business on August 2, 2021.
As mentioned in our release yesterday, we are maintaining our guidance for 2021.
We still expect a GAAP and non-GAAP adjusted earnings per share range of between $2.75 and $3 and a return on average equity of between 17% and 19%.
The guidance assumes no extraordinary weather events in 2021 and also assumes a flat equity market for GAAP EPS.
If weather events exceed plan, we expect to see both the benefit from our claims adjusting business and increased loss costs.
 Assistant:

Chosen response:
compname reports q3 gaap earnings per share of $0.64.
q3 gaap earnings per share $0.64.
qtrly non-gaap adjusted earnings per share of $0.63.3q21 direct premiums earned up 15.0% driven by primary rate increases earning-in.


Prompt:
Human: We ended the year with a record of more than $1.5 billion of premium now in force.
Unfortunately, the industry, markets we served had a record-setting frequency of weather events during the 2020 winter season which impacted our 4th quarter and full year results.
We were impacted by Hurricane Sally, PCS, Zeta and Eta in 2020 and to a much lesser extent Hurricane delta.
In addition, we had exposure to a series of other 2020 PCS weather events and minimal exposure to the Midwest Derecho.
All told, we had a bit over 10,000 claims in the fourth quarter from named 2020 storms and other PCS events.
We did not have any exposure to hurricane Laura or any other weather in Texas or Louisiana including the recent winter storms.
We also had no exposure to the West Coast wildfires as we do not write business in those markets.
Despite the weather in 2020, we continued our focus on underwriting increasing our primary rates in Florida, close to 20% for the full year, including 7% in the 4th quarter for 2020 reinsurance costs as well as increases in some of our other states.
We continue to implement new binding guidelines to address emerging loss trends.
We have continued to maintain a resilient balance sheet that has self funded our risk bearing entities capital requirements in addition to enhancing our reserves.
We continue to be backed by our great reinsurance program and partners with close to 75% of our first event reinsurance capacity for June 1, 2021 secured already.
We continued our geographic expansion efforts in 2020 and implemented our catastrophe rapid response teams during the COVID-19 pandemic which accelerated our use of digital technology for adjusting claims.
We also continue to develop adaptive adjusting approaches to address claims loss cost trends.
We look forward to 2021 as we continue to focus on resiliency and taking the necessary steps to provide reliability to consumers and reduce uncertainty for shareholders.
As a reminder, discussions today on adjusted operating income and adjusted earnings per share are on a non-GAAP basis and exclude effects from unrealized and realized gains and losses on investments, an extraordinary reinstatement premiums and related commissions.
Adjusted operating income also excludes interest expense.
We ended 2020 with total revenue up 14.2% to $1.1 billion, driven primarily by growth in net premiums earned, realized gains on investments and increases in service revenue, partially offset by decreases in net investment income and increased reinsurance costs.
EPS for the quarter was a loss of $0.57 on a GAAP basis and a loss of $0.84 on a non-GAAP adjusted basis.
For the year, we generated earnings per share of $0.60 on a GAAP basis and a loss of $0.90 on a non-GAAP adjusted basis.
These results were impacted predominantly by weather events in 2020 and related social dynamics and increased reinsurance costs.
Our direct premiums written grew by 21.9% in Q4 compared to the prior year's quarter led by the impact of rate increases in Florida and other states taking effect as well as strong direct premium growth in Q4 of 18.9% in states outside of Florida.
For the full year, direct premiums written were up 7% led by rate increases and increased volume as well as strong direct premium written growth of 17.7% in other states and slightly improve policy retention.
On the expense side, the combined ratio decreased 18.9 points for the quarter to 124% but increased 9.7 points for the full year to 113.6%.
The full year increases were driven primarily by an increase of 13 points for increased weather in 2020.
In addition, increases were also attributable to an increase in our core loss pick when compared to the full prior year and the effect on the ratio from increased reinsurance costs.
The increases were partially offset by a lower level of prior years reserve development on prior year's losses in LAE reserves, which accounted for 4.1 loss ratio points.
A benefit from our claims adjusting business and a 90 basis point improvement in the expense ratio, net investment income decreased 62.7% for the quarter and 33.7% for the full year primarily due to lower yields on cash and fixed income investments during 2020 when compared to 2019.
Realized gains for the quarter and for the full year resulted primarily from taking advantage of increased market prices on our available for sale debt investment for portfolio and to a lesser extent aided by the sale of equity securities.
Unrealized gains were driven by market fluctuations in equity securities resulting in a favorable outcome for the quarter and the full year.
In regards to capital deployment, during the fourth quarter, the company repurchased approximately 193,000 shares at an aggregate cost of $2.4 million, for the full year, the company repurchased approximately 1.6 million shares at an aggregate cost of 28.9 million.
For 2021 guidance, we expect a GAAP and non-GAAP adjusted earnings per share range of between $2.75 and $3 assuming no extraordinary weather events in 2021 and a return on average equity of between 17% to 19%.
The guidance assumes no extraordinary weather events in 2021.
It also assumes a flat equity market for GAAP earnings per share if weather events exceed plan, we expect to see both a benefit from our claims adjusting business and increased loss cost.
 Assistant:

Chosen response:
q4 gaap loss per share $0.57.
qtrly adjusted loss per share $0.84.
initiating fy21 guidance: gaap and non-gaap adjusted earnings per share of $2.75 - $3.00.


Prompt:
Human: These uncertainties are detailed in documents filed regularly with the SEC.
We use adjusted constant dollar amounts as lead numbers in our discussion because we believe they more accurately represent the true operational performance and underlying results of our business.
You may also hear us refer to reported amounts, which are in accordance with US GAAP.
Due to the significant impact of the coronavirus pandemic on our prior year figures, today's call also contains certain comparisons to the same period in fiscal 2020 for additional context.
These comparisons are all under the reported dollar basis.
On June 28, 2021, the company completed the sale of its Occupational Workwear business.
Accordingly the company has reported the related held for sale assets and liabilities of this business as assets and liabilities of discontinued operations and included the operating results and cash flows of this business in disc ops for all periods through the date of sale.
Joining me on the call will be VF's Chairman, President and CEO, Steve Rendle; and EVP and CFO, Matt Puckett.
We are encouraged by the strong start to our fiscal 2022 year.
Our teams delivered an outstanding first quarter powering VF back to pre-pandemic revenue levels while driving an earnings recovery well ahead of our initial expectations.
We continue to see broad based momentum across the portfolio, which furthers my confidence in our ability to accelerate growth through fiscal 2022 and beyond.
While the near-term environment remains somewhat clouded by virus surges in Southeast Asia, uncertainties in other regions brought on by the impact of new variants and further pressures on the global supply chain, our teams are executing.
We remain focused on the things that we can control and winning the parts of our business with the consumers coming back strong.
And we remain confident in our ability to continue driving this sharp recovery across our business.
Matt, will walk you through our results in detail, but I'll start off with some Q1 highlights.
VF revenue has surpassed pre-pandemic levels growing 96% or 83% organically to $2.2 billion with momentum across brands, regions, and channels.
Our global DTC business delivered high single-digit growth relative to prior peak levels driven by a strong acceleration from our brick and mortar stores in the US and continued strength in our digital.
Our organic DTC digital business is now 72% above fiscal 2020 levels including the growing benefit of our omnichannel capabilities as we serve our consumers seamlessly across their choice of channel.
We've seen a sharp recovery in our wholesale business, which grew over 100% organically in Q1 approaching prior peak fiscal 2020 levels.
Strong sell-through trends and clean channel inventory levels from the past year are now translating into stronger fall '21 and spring '22 order books supporting an improving outlook for our wholesale business for this year and beyond.
We've seen a strong recovery in our gross margin, which grew 260 basis points to 56.7% in Q1.
This represents organic gross margin expansion relative to prior peak fiscal 2020 levels despite a 30 basis point headwind from a more challenging logistics and freight environment.
VF drove organic earnings growth of 133% delivering $0.27 in Q1.
essentially doubling our plan.
We're pleased to see our top line momentum and strong gross margin expansion translate into better than anticipated, SG&A leverage and earnings flow through an indication of the upside potential of our model as our recovery accelerates.
Now, turning to our brand highlights from the quarter.
The Vans brand as returned to pre-pandemic revenue levels growing 102% in Q1.
The recovery has been led by global DTC business, which drove double-digit growth relative to fiscal 2020 led by 73% growth in digital.
This DTC strength has been broad based with each region reporting positive DTC growth relative to pre-pandemic levels.
More Vans consumers have returned to in-person shopping experiences earlier than expected and we see encouraging trends in our DTC KPIs with consumers buying more frequently and spending more per purchase relative to historic levels.
In EMEA despite the continued impact of lockdowns and supply chain disruptions, the Vans business grew 125% this quarter representing 30% growth relative to fiscal 2020, with strength across all major markets as stores reopened throughout the region.
Vans APAC business grew 19% in Q1, led by 22% growth in China.
June marked a milestone for the brand in China with the stock launch of the Vans Family program while the official launch will be celebrated with the Super Brand Day on Tmall tomorrow.
We have already registered over one million new loyalty members following the initial launch bringing Global Vans Family membership to nearly 17 million consumers.
Vans kicked off it's 52 week drop calendar this quarter seeking to create a consistent, predictable, globally aligned and focused approach to drive brand energy and consumer engagement.
Seven weeks into the program, we are encouraged by the initial consumer reads and the instance sell out of several early drops.
Internally, the Vans team has increased its focus, energy, and resources around driving newness and compelling storytelling, which we believe will unlock further long-term value for the brand.
The team is on track to more formally market the Vans drop list in fiscal Q3 ahead of the fall holiday season.
We remain bullish on the set up for Vans moving through fiscal 2022 and are encouraged by the early reads from the back to school season underway.
We are raising off our full year outlook to growth of 28% to 29%, representing growth of 9% to 10% relative to fiscal 2020.
Moving on to the North Face.
Global brand revenues increased 83% representing 6% growth above pre-pandemic levels.
All regions rebounded sharply in Q1, highlighted by continued exceptional performance in EMEA, which grew 142% versus the prior year, and 58% relative to fiscal '20, despite the impact of door closures over the period.
The APAC business grew 22% in Q1, highlighted by 80% growth in digital relative to fiscal 2020 levels.
The North Face's spring sell-through rates where some of the highest in years reflecting strong progress on the brand's ability to drive 365 day relevancy.
TNF continues to drive energy in on-mountain categories with the FutureLight franchise as well as the Vectiv footwear rollout, further establishing its legitimacy in outdoor footwear.
We also see outsized growth in the casual categories such as logo wear, which grew over 100% in Q1 as consumers show strong engagement with the brand Off-Mountain.
TNF loyalty program the XPLR Pass has grown to over 7 million consumers adding nearly 300,000 new members in Q1, driven by exclusive member experiences and reaching the consumer journey.
We continue to be encouraged by the broad-based global momentum at The North Face and now expect the brand delivered 26% to 27% growth this year, representing 15% to 17% growth relative to fiscal 2020.
Alongside the significant top line recovery, we're seeing strong improvements in profitability and continue to expect mid teen profitability for TNF in fiscal 2022.
The Timberland brand delivered 63% growth in Q1 tracking ahead of plan.
We are encouraged by high-teens growth in the Americas, and 87% growth in digital relative to fiscal 2020 level.
We continue to see outsized growth from Outdoor, Apparel, and Timberland PRO each growing over 75% in the quarter.
Momentum behind core iconic product also continues with heritage styles being strong demand despite historically low inventories.
Our Timberland team remains committed to its purpose led vision highlighted by the recently announced Global Product Take-Back Program in partnership with ReCircled.
Beginning this fall US consumers will be able to return any Timberland product to a brand store to either be refurbished for resale or recycled into future products.
This program supports the brand's bold vision announced last fall for products to have a net positive impact on nature by 2030.
We are encouraged by Timberland's strong start to the year and as a result, we now expect the brand to deliver modest growth relative to fiscal 2020 surpassing pre-pandemic revenues beginning in Q2.
Dickies delivered another exceptional quarter, growing 58% in Q1, well ahead of our plan as the brand has kicked off several new campaigns and inventories become more available, we've been pleasantly surprised by the intensity of sell-through performance across all wholesale partners in the US.
This acceleration continues to be driven by both Work-Inspired Lifestyle product, which reported strong growth across all three regions as well as core work items.
Work-Inspired Lifestyle now represents about 40% global brand revenue.
Importantly, the Dickies brand has begun to deliver meaningful profitability improvements, driven by both gross margin expansion and SG&A efficiencies.
Q1 represented a strong start to our goal of returning to double-digit profit margins in the Work segment in fiscal 2022.
Following a strong Q1 performance and accelerating demand signals across channels, we are confident raising the full-year outlook for the Dickies brand to mid teen growth in fiscal 2022 representing over 25% growth relative to fiscal 2020 levels.
A quick update on Supreme we continue to be happy with the integration process.
The VF's supply chain organization continues to advance engagement with the Supreme teams with particular leverage opportunities in logistics capabilities, scale and relationships, which couldn't come in a more opportune time.
One quarter into our fiscal year, we remain confident in our outlook of $600 million and $0.25 from the brand.
Our strong results are reflection of the consistent execution, hard work and inspiring dedication of our teams around the world.
This continued passion and energy alongside the broad based nature of VF's acceleration give me great confidence in our ability to continue driving the strong recovery underway.
While the first quarter represents a small portion of our total year, we're starting off fiscal 2022 building up the great momentum which began in February of this year.
I'm really happy to update you on our strong Q1 results and revised outlook for the year.
We are encouraged by the continued broad-based momentum across our business and the set up for each of our big brands heading into the heart of our fiscal year.
Despite additional pressures throughout the global supply chain.
I remain confident in our team's ability to execute and to build on the strong earnings recovery delivered in Q1.
Let me start with an overview of the operating environment across geographic regions.
In the Americas, less than 5% of our stores were closed at the beginning of the quarter and all stores are currently operational.
The strong US consumer, easing US restrictions, and increased vaccination rates have encouraged a gradual recovery in foot traffic alongside continued strength in conversion.
Our Americas DTC business grew 84% organically in Q1, surpassing pre-pandemic levels, led by a sharper than expected recovery in our brick and mortar business.
Consumer appetite for athletic athleisure and outdoor categories remained strong benefiting our direct business as well as the performance of our key accounts.
Low inventories and strong sell-through trends continue to drive down promotional activity and improved quality of sales across the marketplace, which is resulting in stronger than expected order books for the upcoming fall and spring seasons.
Moving onto the EMEA region, while lockdown measures continue to affect economic activity our business has remained resilient.
Growing 97% organically in Q1, representing 13% growth relative to fiscal 2020.
Both wholesale and DTC channels returned to growth relative to 2020.
As continued strength from both our direct digital channel and from digital tightened partners have more than offset the impact of brick and mortar store closures.
About 60% of our EMEA stores were closed at the start of the first quarter.
As we sit here today, all of those doors have now reopened.
Consumer confidence is improving as restrictions ease and we've seen strong performance from our brick and mortar fleet following reopening.
For example, our UK business delivered triple-digit growth from open doors following 3 months of lockdown, representing growth of nearly 30%, relative to fiscal 2020.
Finally, our APAC region continues to deliver double-digit growth despite sporadic resurgence of the virus across many market.
Our China business grew 12% in Q1, which was impacted by a wholesale timing shift of revenues from Q1 into Q2.
Excluding this impact, China would have delivered mid teen growth this quarter.
We continue to see digitally led growth in the region, particularly with our tightened partners and remain confident in our ability to deliver greater than 20% growth in China in fiscal 2022.
While we remain pleased with our APAC performance to-date we are observing most Southeast Asian market facing various degrees of lockdowns and travel restrictions and while only about 5% of our stores are currently closed commercial activity has been impacted across most APAC markets outside of China and Hong Kong.
This latest wave also presents additional near-term uncertainty for our global supply chain.
In recent weeks more widespread virus outbreaks in key sourcing countries with lower levels of vaccinations have resulted in temporary factory lockdowns and manufacturing capacity constraints.
Our supply chain also continues to be impacted by port delays, equipment availability and other logistics challenges.
Essentially, every link in the supply chain has been impacted to varying degrees over the last 18 months.
And while we're not immune to this, we believe we've managed these challenges relatively better than most.
Our teams remain focused on delivering the products to satisfy increasing demand signals in the most cost effective and efficient way.
Some of the actions include using air freights, other means of expedited shipping and dual sourcing where appropriate.
While we remain confident in our ability to service our strong growth plan, there is a financial implications to these actions.
For example, we expect to spend more than $35 million in incremental expedited freight charges relative to fiscal 2020.
We view our supply chain is a key competitive advantage of VF and our teams are proving this now more than ever.
I want to echo Steve's appreciation for the supply chain teams' incredible execution over the past 18 months.
As a result of their tireless and tremendous effort, I remain confident in our ability to continue navigating this dynamic environment.
Now, moving into our Q1 financial results.
Total VF revenue increased 96% or 83% organically to $2.2 billion reaching pre-pandemic levels one quarter ahead of our initial expectations.
Our Q1 digital business is 72% above fiscal 2020 levels organically, representing a 31% two year CAGR.
We also continuously strengthened from key digital partners globally with pure play digital wholesale growth of over 70% relative to fiscal 2020.
VF total digital penetration was roughly a quarter of our Q1 revenues which represents about 2 times our penetration from the first quarter of 2020.
Gross margin expanded 260 basis points to 56.7% representing organic expansion from Q1 peak gross margin levels in fiscal 2020.
Relative to last year, the strong expansion was driven by greater full price selling partially offset by the expedited freight costs and business mix as our wholesale business rebounded sharply in the quarter.
When compared to fiscal 2020 gross margins, we generated a strong mix benefit, partially offset by the incremental air freight costs and FX.
Operating margin expanded meaningfully to 6.8% driven by the strong gross margin performance and SG&A leverage relative to the prior year.
We delivered earnings per share of $0.27 in Q1, representing 133% organic growth driven by a stronger top line and earnings flow through relative to our initial expectations.
Owing to strong broad-based performance in Q1, we are raising our full-year fiscal 2022 outlook.
Our outlook today assumes no significant changes to the environment, including increased disruption to our supply chain operations.
VF's revenue is now expected to be at least $12 billion representing at least 30% growth from fiscal 2021 and mid-teen increase relative to our prior peak revenue in fiscal 2020.
Excluding the Supreme business, our fiscal 2022 outlook implies organic growth of at least 25% representing at least 9% organic growth relative to fiscal 2020.
As Steve covered, the increase to our revenue guidance is broad based across the portfolio, the stronger outlooks for each of our top core brands and sizable increases in two of our emerging brands, Altra and SmartWool.
Specifically, the improved outlooks are supported by stronger-than-anticipated order books and the accelerating DTC trends we've observed over the past five months.
Moving down to P&L we still expect gross margin to exceed 56% despite a 20 basis point to 30 basis point headwind from additional airfreight that wasn't assumed in our initial outlook.
We now expect operating margins to be at least 13%, an improvement of over 20 basis points from our initial outlook, a signal to the upside potential of our model as their topline accelerates.
Fiscal 2022 earnings per share is now expected to be at least $3.20 including a $0.25 per share contribution from the Supreme brand representing at least 20% earnings growth relative to fiscal 2020.
We continue to expect to generate over 1 billion operating cash flow this year with planned capital expenditures of about $350 million including the impact of growth investments, as well as deferred capital spending from fiscal 2021.
As announced on June 28, we closed the sale of the Occupational Work business this quarter providing roughly $615 million of additional liquidity.
These proceeds are reflected in our fiscal 2022 outlook for total liquidity to exceed $4 billion.
We expect to exit this year with net leverage between 2.5 times and 3 times providing us meaningful near term optionality deploy excess capital moving forward.
We took bold decisive actions last year to position our brands and the enterprise with a strong recovery currently underway.
And the balanced broad based nature of this recovery, along with the continued optionality that our model provides gives me confidence in our ability to drive sustainable long-term growth moving forward.
 Assistant:

Chosen response:
vf sees fy adjusted earnings per share at least $3.20.
sees fy adjusted earnings per share at least $3.20.
sees fy revenue at least $12 billion.


Prompt:
Human: Nick will then summarize the performance of our Tobacco business.
Now turning to Vector Group's consolidated balance sheet.
At June 30, 2021, our balance sheet remained strong.
We maintained significant liquidity with cash and cash equivalents of $490 million, including cash of $155 million at Douglas Elliman and $108 million at Liggett.
We also held investment securities and investment partnership interests with a fair market value of $212 million at June 30, 2021.
Turning to Vector Group's consolidated results from operations for the three months ended June 30, 2021, Vector Group's revenues were $729.5 million compared to $445.8 million in the 2020 period.
The $283.8 million increase in revenues was a result of an increase of $266.8 million in the Real Estate segment and $17 million in the Tobacco segment.
Net income attributed to Vector Group was $93.3 million or $0.61 per diluted common share compared to $25.8 million or $0.16 per diluted common share in the second quarter of 2020.
The company recorded adjusted EBITDA of $144.2 million compared to $76.5 million in the prior year.
Adjusted net income was $96.5 million or $0.63 per diluted share compared to $28.7 million or $0.19 per diluted share in the 2020 period.
Moving on to results for the six months ended June 30, 2021.
Vector Group's revenues were $1.27 billion compared to $900.2 million in the 2020 period.
The $373 million increase in revenues were primarily attributed to the Real Estate segment.
Net income attributed to Vector Group was $125.3 million or $0.81 per diluted common share compared to $22.5 million or $0.14 per diluted common share in the 2020 period.
The company recorded adjusted EBITDA of $238.6 million compared to $136.7 million in the prior year.
Adjusted net income was $141.8 million or $0.92 per diluted share compared to $68.6 million or $0.45 per diluted share in the 2020 period.
Moving on to results for the last 12 months ended June 30, 2021.
Vector Group reported revenues of $2.38 billion, net income of $195.7 million and adjusted EBITDA of $435.3 million for the last 12 months ended June 30, 2021.
Now turning to Douglas Elliman's financial performance for the three, six and last 12 months ended June 30, 2021.
For the three months ended June 30, 2021, Douglas Elliman reported $392 million in revenues compared to $132.9 million in revenues in the 2020 period.
For the second quarter of 2021, Douglas Elliman reported net income of $43.2 million and adjusted EBITDA of $45.3 million compared to a net loss of 50 -- excuse me, net loss of $5 million and adjusted EBITDA loss of $1.1 million in the second quarter of 2020.
The net loss for the three months ended June 30, 2020, included pre-tax restructuring charges of $3 million.
For the six months ended June 30, 2021, Douglas Elliman reported $664.8 million in revenues compared to $298.5 million in revenues in the 2020 period.
For the 2021 six-month period, Douglas Elliman reported net income of $57.1 million and adjusted EBITDA of $61.6 million compared to a net loss of $74.1 million and an adjusted EBITDA loss of $8.8 million in the 2020 period.
The net loss in the 2020 period included pre-tax charges for noncash impairments of $58.3 million and pre-tax restructuring charges of $3 million.
For the last 12 months ended June 30, 2021, Douglas Elliman reported $1.14 billion in revenues, $83 million in net income and $92.4 million in adjusted EBITDA.
In addition, Douglas Elliman reported closed sales of $42.9 billion for the last 12 months ended June 30, 2021.
Douglas Elliman's strong year-to-date results were driven by continued momentum in all markets, and both closed sales volume and revenues more than doubled from the comparable 2020 period.
We are particularly pleased with the continued strength of the South Florida market as well as the rebound of New York City during the first six months of 2021.
In addition, Douglas Elliman's gross margin or company dollar increased to $105.5 million in the second quarter of 2021 from $42.7 million in the second quarter of 2020.
For the six months ended June 30, 2021, Douglas Elliman's gross margin increased to $179.6 million from $95.9 million for the same period in 2020.
As Douglas Elliman's revenues and gross margin significantly increased in 2021, we discontinued certain expense reductions implemented in the second quarter of 2020, including reductions to advertising and distressed scenario compensation.
Liggett continued its strong 2021 performance during the second quarter with another significant increase in year-over-year earnings.
Despite a challenging competitive marketplace, our go-to-market strategy continues to prove successful, and we remain confident our brand portfolio is well positioned to meet evolving market demands.
In the second quarter of 2021, Eagle 20's volumes remained stable and the brand delivered significantly higher margins, while Pyramid continues to deliver substantial profit and market presence to the company.
We are also very pleased with the performance of our price-fighting brand, Montego, as we expand its targeted distribution footprint.
I will now turn to the combined tobacco financials for Liggett Group and Vector Tobacco.
For the three and six months ended June 30, 2021, revenues were $329.5 million and $598 million, respectively, compared to $312.5 million and $599.6 million for the corresponding 2020 periods.
Tobacco adjusted operating income for the three and six months ended June 30, 2021, was $103.2 million and $182.1 million compared to $79.4 million and $148.5 million for the corresponding periods a year ago.
Liggett's second quarter earnings represent a 30% increase over the year ago period and were primarily the result of higher gross margins associated with higher pricing and promotional spending efficiencies.
We also continue to manage our tobacco operations cost base effectively.
In addition to these factors, increased wholesale inventories associated with the timing of our price increase at the end of June contributed to the quarter-over-quarter earnings increase.
We estimate that approximately 30% of the almost $24 million earnings increase is the result of these incremental wholesale purchases.
We expect this to reverse in the third quarter as inventories normalize.
According to Management Science Associates, overall industry wholesale shipments through June 30, 2021, were down approximately 5% compared to last year, while Liggett's wholesale shipments decreased by 7.7% for the comparable period.
As we regularly note, we believe retail shipments are a better indicator of short-term industry trends, because inconsistent wholesaler purchasing patterns typically do not impact retail sales.
Liggett's retail shipments through June 30, 2021, declined 6.4% from the year ago period, while industry retail shipments decreased 2.7% during the same time frame.
As a result, Liggett's year-to-date retail share has declined slightly to 4.13% from 4.29% in the corresponding period last year.
As noted on previous calls, we anticipated modest declines in Liggett's year-over-year retail share due to increased net pricing consistent with our successful long-term income growth strategy.
However, we do expect this trend to abate throughout the second half of this year as we expand Montego markets.
Despite price increases, Eagle 20's retail volume remained strong.
It is currently the third largest discount brand in the U.S. and is sold in approximately 85,000 stores nationwide.
Montego is competitively priced in the growing deep discount segment, and we are taking a carefully targeted approach with expansion.
To date, we remain pleased with the market's response to Montego, which is now sold in nearly 30,000 stores.
Montego delivered approximately 12% of Liggett's volume for the second quarter of 2021 compared to 5% in the second quarter of last year.
In summary, we are pleased with the operational and financial performance of our tobacco business.
The second quarter results continue to validate our market strategy and reflect the competitive strength we have in the deep discount segment, including our broad base of distribution, consumer-focused programs and the scope and executional capabilities of our sales force.
As we look ahead, we remain focused on generating incremental operating income from the strong sales and distribution base of our brand portfolio.
Finally, while we are always subject to industry regulatory and general market risks, we remain confident that we have effective programs and infrastructure in place to keep our business operating efficiently while supporting market share and profit growth.
Vector Group had an outstanding second quarter, underscored by record quarterly revenues in our Real Estate segment and record operating income in both our Tobacco and Real Estate segments.
We have strong cash reserves, have consistently increased our tobacco market share on profits over the long term and have taken the necessary steps to position our Real Estate business for future continued success.
We are pleased with our long-standing history of paying a quarterly cash dividend.
It remains an important component of our capital allocation strategy, and it is our expectation that our policy will continue well into the future.
 Assistant:

Chosen response:
q2 earnings per share $0.61.
q2 revenue rose 64 percent to $729.5 million.


Prompt:
Human: If you have any questions after reviewing these tables, please feel free to contact our Investor Relations team after the call.
We saw significant improvement in refining margins globally in the third quarter as economic activity and mobility continued to recover in key markets.
Refining margins were supported by strong recovery in product demand, coupled with product inventories falling to low levels during the quarter.
light product inventories are now at five-year lows and total light product demand is over 95% of the 2019 level.
Across our system, current gasoline sales are at 95% of the 2019 level, and diesel sales are 10% higher than in 2019.
And on the crude oil side, medium and heavy sour crude oil differentials widened during the quarter as OPEC+ increased supply.
Charles and Meraux refineries and the Diamond Green Diesel plant.
We immediately deployed emergency teams and supplies after the storm to help our employees, their families, and the surrounding communities in the restoration and recovery effort.
The affected facilities did not sustain significant damage from the storm.
And once power and utilities were restored, the plants were successfully restarted.
I'm very proud of our team's efforts and the ability to safely shut down and restart our operations.
Despite the impacts of the hurricane, we also completed the Diamond Green Diesel expansion project, DGD 2, in the third quarter ahead of schedule and on budget and are in the process of starting up the new unit.
DGD 2 increases renewable diesel production capacity by 400 million gallons per year bringing DGD's total renewable diesel capacity to 690 million gallons per year.
In addition, we successfully completed and started up the new Pembroke Cogeneration Unit in the third quarter, which is expected to provide an efficient and reliable source of electricity and steam and further enhance the refinery's competitiveness.
Looking ahead, the DGD 3 project at our Port Arthur refinery continues to progress and is still expected to be operational in the first half of 2023.
With the completion of this 470 million gallons-per-year plan, DGD's total annual capacity is expected to be 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha.
The large-scale carbon sequestration project with BlackRock and Navigator is also progressing on schedule.
Navigator has received the necessary board approvals to proceed with the carbon capture pipeline system as a result of a successful binding open season.
Valero is expected to be the anchor shipper with eight ethanol plants connected to this system, which should provide a higher ethanol product margin uplift.
The Port Arthur Coker project, which is expected to increase the refinery's utilization rate and improve turnaround efficiency, is still expected to be completed in 2023.
On the financial side, we remain disciplined in our allocation of capital, which prioritizes a strong balance sheet and an investment-grade credit rating.
We redeemed the entire outstanding principal amount of our $575 million floating-rate senior notes due in 2023 in the third quarter, and we ended the quarter well capitalized with $3.5 billion of cash and $5.2 billion of available liquidity, excluding cash.
Looking ahead, we continue to have a favorable outlook on refining margins as a result of low global product inventories, continued demand recovery, and global balances supported by the significant refinery capacity rationalization seen over the last year and a half.
In addition, the expected high natural gas prices in Europe and Asia through the winter should further support liquid fuels demand as power generation facilities, industrial consumers, and petrochemical producers see incentives to switch from natural gas to refinery oil products for feedstock and energy needs.
Continued improvement in earnings of our core refining business, coupled with the ongoing expansion of our renewables businesses should strengthen our competitive advantage and drive long-term shareholder returns.
So, with that, Homer, I'll hand the call back to you.
For the third quarter of 2021, net income attributable to Valero stockholders was $463 million or $1.13 per share, compared to a net loss of $464 million or $1.14 per share for the third quarter of 2020.
Third-quarter 2021 adjusted net income attributable to Valero stockholders was $500 million or $1.22 per share, compared to an adjusted net loss of $472 million or $1.16 per share for the third quarter of 2020.
The refining segment reported $835 million of operating income for the third quarter of 2021, compared to a $629 million operating loss for the third quarter of 2020.
Third-quarter 2021 adjusted operating income for the refining segment was $853 million, compared to an adjusted operating loss of $575 million for the third quarter of 2020.
Refining throughput volumes in the third quarter of 2021 averaged 2.9 million barrels per day, which was 338,000 barrels per day higher than the third quarter of 2020.
Throughput capacity utilization was 91% in the third quarter of 2021, compared to 80% in the third quarter of 2020.
Refining cash operating expenses of $4.53 per barrel were $0.27 per barrel higher than the third quarter of 2020 primarily due to higher natural gas prices.
The renewable diesel segment operating income was $108 million for the third quarter of 2021, compared to $184 million for the third quarter of 2020.
Renewable diesel sales volumes averaged 671,000 gallons per day in the third quarter of 2021, which was 199,000 gallons per day lower than the third quarter of 2020.
The lower operating income and sales volumes in the third quarter of 2021 are primarily attributed to plant downtime due to Hurricane Ida.
The ethanol segment reported a $44 million operating loss for the third quarter of '21, compared to $22 million of operating income for the third quarter of 2020.
Ethanol production volumes averaged 3.6 million gallons per day in the third quarter of 2021, which was 175,000 gallons per day lower than the third quarter of 2020.
For the third quarter of 2021, G&A expenses were $195 million and net interest expense was $152 million.
Depreciation and amortization expense was $641 million, and income tax expense was $65 million for the third quarter of 2021.
The effective tax rate was 11%, which reflects the benefit from the portion of DGD's net income that is not taxable to us.
Net cash provided by operating activities was $1.4 billion in the third quarter of 2021.
Excluding the favorable impact from the change in working capital of $379 million and our joint venture partner's 50% share of Diamond Green Diesel's net cash provided by operating activities, excluding changes in DGD's working capital, adjusted net cash provided by operating activities was $1 billion.
With regard to investing activities, we made $585 million of total capital investments in the third quarter of 2021, of which $191 million was for sustaining the business, including costs for turnarounds, catalysts, and regulatory compliance and $394 million was for growing the business.
Excluding capital investments attributable to our partner's 50% share of Diamond Green Diesel and those related to other variable interest entities, capital investments attributable to Valero were $392 million in the third quarter of 2021.
Moving to financing activities.
We returned $400 million to our stockholders in the third quarter of 2021 through our dividend, resulting in a payout ratio of 40% of adjusted net cash provided by operating activities for the quarter.
With respect to our balance sheet at quarter-end, total debt and finance lease obligations were $14.2 billion, and cash equivalents were $3.5 billion.
And as Joe mentioned earlier, we redeemed the entire outstanding principal amount of our $575 million floating-rate senior notes due in 2023 in the third quarter.
The debt-to-capitalization ratio, net of cash and cash equivalents, was 37%.
And at the end of September, we had $5.2 billion of available liquidity, excluding cash.
We still expect capital investments attributable to Valero for 2021 to be approximately $2 billion, which includes expenditures for turnarounds, catalysts, and joint venture investments.
About 60% of our capital investments is allocated to sustaining the business and 40% to growth.
And over 60% of our growth capital in 2021 is allocated to expanding our renewable diesel business.
For modeling our fourth-quarter operations, we expect refining throughput volumes to fall within the following ranges: Gulf Coast at 1.67 million to 1.72 million barrels per day; Mid-Continent at 455,000 to 475,000 barrels per day; West Coast at 230,000 to 250,000 barrels per day; and North Atlantic at 435,000 to 455,000 barrels per day.
We expect refining cash operating expenses in the fourth quarter to be approximately $4.70 per barrel.
With respect to the renewable diesel segment, we expect sales volumes to average 1 million gallons per day in 2021.
Operating expenses in 2021 should be $0.50 per gallon, which includes $0.15 per gallon for noncash costs such as depreciation and amortization.
Our ethanol segment is expected to produce 4.2 million gallons per day in the fourth quarter.
Operating expenses should average $0.43 per gallon, which includes $0.05 per gallon for noncash costs such as depreciation and amortization.
For the fourth quarter, net interest expense should be about $150 million, and total depreciation and amortization expense should be approximately $600 million.
For 2021, we still expect G&A expenses, excluding corporate depreciation, to be approximately $850 million.
Before we open the call to questions, we, again, respectfully request that callers adhere to our protocol of limiting each turn in the Q&A to two questions.
If you have more than two questions, please rejoin the queue as time permits.
Please respect this request to ensure other callers have time to ask their questions.
 Assistant:

Chosen response:
compname posts q3 adjusted earnings per share $1.22.
q3 adjusted earnings per share $1.22.
q3 earnings per share $1.13.
refinery throughput volumes averaged 2.9 million barrels per day in q3, which was 338 thousand barrels per day higher than q3 2020.


Prompt:
Human: Avner will review our financial performance and provide trends and key assumptions for the second quarter and full year 2021, with closing remarks from Steve.
This will be followed by Q&A.
A replay of today's call will be available for the next seven days.
I would now like to call over to our President and Chief Executive Officer, Steve Kaniewski.
Before we recap our first quarter results, I would like to share some opening comments.
On March 8th, we recognized our 75th anniversary as a company.
We've come a long way since 1946, when our Founder, Robert B. Daugherty, a young marine coming home after World War II, started a fabrication shop in the small community of Valley in Nebraska.
Our business has certainly evolved over the past 75 years, but over this time we have remained centered on serving our customers and delivering value through our focus on execution, and our commitment to conserving resources and improving lives.
As we reflect on our history, we're very proud of the impact we've had on the lives of employees, customers, suppliers, business partners, communities and all those we have touched.
As we look forward, we are energized by the opportunity to continue expanding this impact long into the future.
We are also excited to host our Virtual Investor Day coming up in May, where we will share more about our strategic vision for the company, and have several of our business leaders provide greater insight into their businesses and markets.
Our disciplined and deliberate strategy to be the price leader in all our markets, enabled by our strong product portfolio has served us well in this unprecedented inflationary environment.
I also want to recognize our operations teams who have been working hard since the onset of the pandemic, and redoubled their efforts this past quarter to secure our supply chain.
Through these diligent and focused efforts, we were able to avoid material disruptions in our operations, and deliver solid operating income growth for the company.
Net sales of $774.9 million, increased $100.7 million or 14.9% compared to last year, due to significantly higher sales in the Irrigation and Utility Support Structure segments.
Sales of $253.1 million grew $27.7 million or 12.3% compared to last year.
Strong demand for renewable energy generation and utilities increasing investments in grid hardening and resiliency continue to drive sales growth.
Moving to Engineered Support Structures.
Sales of $222.3 million decreased $8.4 million or 3.6% compared to last year.
Favorable pricing, growth in wireless communication sales, and favorable currency impacts were more than offset by anticipated lower transportation market volumes, as delays in the FAST Act approval during 2020, and the impacts from COVID-19 continued to affect the timing of road and construction projects.
Wireless communication structures and components sales grew 20.6% compared to last year.
Strong demand was led by carriers increasing their capital spending in support of 5G build-outs, as evidenced by significantly higher sales of our new small cell product offering and existing component sales.
Favorable pricing in all regions also contributed to sales growth.
Sales of $93.3 million, grew $5.1 million or 5.9% compared to last year, and improved sequentially from last quarter, primarily from more favorable pricing and improving end market demand.
In Irrigation, sales of $229.7 million, grew $72.9 million or 46.5% compared to last year, with growth across most global regions, including 34% growth in our technology sales this quarter.
In North America sales grew 15% year-over-year.
Farmer sentiment has improved significantly, and the positive market drivers we mentioned last quarter are generating strong order flow.
Agricultural commodity prices remain at multi-year highs, and net farm income levels are expected to remain elevated.
Overall, world market demand for ethanol and very low feed and protein stocks in the U.S. and China are driving significantly higher demand for grain exports.
International sales growth more than doubled compared to last year, and was led by higher sales in the Middle East, European markets and in Brazil, where we recognized another record quarter of sales in local currency.
Deliveries of the multi-year project in Egypt continued during the quarter, and the project is tracking well.
Sales in this segment were slightly below the range that we guided to last quarter, mainly due to a series of supply constraints of certain irrigation components.
The strength of our global supply chain, and the agility of our global footprint helped mitigate the impact and others across our businesses.
And these constraints have improved as we've entered the second quarter.
This is just timing and we expect these sales to be recognized in the second quarter.
Scalability is one of the benefits of our portfolio, enabling us to purchase mill direct steel and minimizing disruption in the procurement of steel, zinc and other metals to meet customer order commitments.
Turning to Slide 5.
Last month, President Biden revealed the American Jobs Plan, valued at more than $2 trillion.
This multi-year stimulus package includes approximately $620 billion to modernize roads, bridges and highways.
A $100 billion allocated to electrical grid investments and $100 billion focused on high-speed broadband investments.
We recognize that additional details and approvals must be worked through, so the timing of these benefits are uncertain.
However, we believe the administration's increased emphasis on upgrading aging infrastructure on our nation's roads and highways, reducing traffic congestion and carbon emissions, hardening the electrical grid, and increasing access to wireless connectivity across the country, will provide longer-term funding, stability that will have a positive impact on our infrastructure businesses.
Moving to Slide 6.
Last month, we released our Annual Sustainability Report, highlighting the contributions of our products and services to conserve resources, improve life and build a more sustainable world.
I'm proud to have also announced our 2025 sustainability goals for carbon intensity, global electricity and global combustion fuel, along with setting water standards across the enterprise within this report.
Later today, as a part of our Earth Day activities, we will commemorate the installation of our 1-megawatt solar field at our Valley, Nebraska campus.
We are proud to be operating the largest, privately owned, behind-the-grid solar field in the State of Nebraska.
Covering more than four acres, it will provide our campus with 6% of its electricity needs.
I want to congratulate our team and our business partners who work diligently on this project.
Strengthening our commitment to innovation with sustainability in mind.
We look forward to providing more updates on our ESG initiatives at our Virtual Investor Day and throughout the year.
Turning to slide eight and first quarter results, operating income of $77.2 million or 10% of sales was similar in quality of earnings to last year, driven by higher volumes in irrigation in utility, favorable pricing, which helped offset the impact of rapid raw material cost inflation and improved operational efficiencies.
First quarter diluted earnings per share of $2.57, grew 29.1% compared to last year, driven by higher operating income and a more favorable tax rate of 21.9%, which was primarily due to a one-time incremental tax benefit associated with employee stock option exercises.
Turning to the segments.
On Slide 9, in Utility Support Structures, operating income of $21.7 million, or 8.6% of sales, decreased 380 basis points compared to last year.
Strong volumes and improved operational performance were more than offset by the impact of rapidly rising raw material costs, which could not yet be recovered through pricing.
Moving to Slide 10.
In Engineered Support Structures, operating income of $19.9 million, or 9% of sales, increased 210 basis points over last year.
Overall, we were very pleased with the results from the actions we took to improve performance through proactive pricing strategies and reduce SG&A expense to offset inflation and the lower volume.
Turning to Slide 11.
In the Coatings segment, operating income of $12.9 million, or 13.8% of sales, was 130 basis points higher compared to last year.
Favorable pricing offset lower external volumes due to COVID impacts and end markets and a one-time natural gas expense of approximately $800,000 related to the February winter weather event in Texas.
Moving to Slide 12.
In the Irrigation segment, operating income of $38.7 million or 16.9% of sales, was 180 basis points higher compared to last year.
Strong volumes and improved operational efficiency were partially offset by higher R&D expense for strategic technology growth investments.
Turning to cash flow on Slide 13.
We are focused on inventory optimization and overall improvement of a cash conversion cycle across our businesses.
These efforts helped us deliver operating cash flow of $33.2 million and positive free cash flow this quarter, despite extraordinary inflationary pressures.
Inventory levels are expected to remain elevated this year due to higher steel costs.
Turning to Slide 14, for a summary of capital deployment.
Capital spending in first quarter was approximately $28 million and we returned $21 million of capital to shareholders through dividends and share repurchases, ending the quarter with $391.5 million of cash.
We continued to have an active acquisition pipeline and are prioritizing strategic investments in technology, especially in irrigation, higher-growth products and markets, and business solution that align with ESG principles while meeting our return on invested capital goals.
Moving now to Slide 15.
Our balance sheet remains strong with no significant long-term debt maturities until 2044.
Our leverage ratio of total debt-to-adjusted EBITDA of 2.1 times remains within our desired range of 1.5 to 2.5 times and our net debt-to-adjusted EBITDA is at 1 times.
For the second quarter, we estimate net sales to be between $805 million and $830 million, and operating income margins between 9.5% to 10.5% of net sales.
The tax rate for second quarter is expected to be between 23% and 24% due to the execution of certain U.S. tax strategies.
We are also reaffirming our outlook for the full year.
Net sales are estimated to grow 9% to 14% year-over-year, which assumes a foreign currency translation benefit of 2% of net sales.
Earnings per share is estimated to be between $9 and $9.70, excluding any restructuring activities.
As mentioned last quarter with unprecedented raw material cost increases and higher freight costs, we continue to take quick and deliberate steps to implement pricing actions across all our segments, including multiple increases since the beginning of 2021, and are maintaining these strategies across our served markets.
We are already seeing the benefit in most of our businesses with an improvement in Utility Support Structure expected in the second half of the year.
Turning to our segment outlook on Slide 17.
In Utility Support Structures, our record global backlog is providing good visibility for 2021 and beyond.
Although steel costs remain at elevated levels, we believe the biggest challenges are behind us.
We expect the quality of earnings to improve beginning in the second quarter.
Contractual increases in selling prices will begin offsetting steel cost inflation and we expect a meaningful improvement in gross profit margin to accelerate in the second half of the year as higher steel cost indices are reflected in selling prices.
Moving to Engineered Support Structures.
We continue to expect some short-term softness in transportation markets as projects have been delayed due to the delays in 2020 FAST Act.
extension approvals and continued COVID-19 impacts, especially in France and India.
Demand for wireless communication structures and components remains strong.
We believe sales will grow 15% to 20% in 2021, in line with market expectations, as carriers investment in 5G are expected to accelerate throughout this year.
Moving to Coatings, end-market demand tends to correlate closely to industrial production levels.
We expect to see modest sequential growth as the economy continues to improve and benefit from government stimulus initiatives in certain international markets, including Australia.
Moving to irrigation, we expect favorable comparisons based on the estimated timing of deliveries of the large Egypt project, strong net farm income driving positive farmer sentiment, and a robust Brazilian market.
We expect another quarter of positive free cash flow, driven by our emphasis and improving the cash conversion cycle and strategic inventory management.
Raw material inflation can create short-term impacts on cash flows, and as previously mentioned, we have enacted strategies to manage these impacts, including certain raw material financial hedges to cover backlogs.
Moving to Slide 18.
We are off to a great start in 2021 across all end markets.
As evidenced by our record $1.3 billion backlogs at the end of the first quarter.
In Utility, our record backlog -- global backlog of nearly $720 million demonstrates the ongoing demand and necessity for renewable energy solutions, grid hardening and expanding ESG focus within the utility industry.
We are very pleased to announce that in the first quarter, we were awarded the third and fourth purchase orders, totaling $220 million for the large project in the Southeast U.S., extending our backlog through the beginning of 2023 with that project and reconfirming our customers' confidence in our performance.
We continue to strengthen key alliances with utility customers, and with our broad portfolio of products and manufacturing capabilities, we are well positioned to be the preferred strategic partner with utilities and developers, for their renewable energy and grid hardening goals.
In Engineered Support Structures, we expect a solid year with some short-term softness in transportation, but the longer-term market trends, especially for road construction and single-family housing support future growth.
Further, the critical need for infrastructure investment globally gives us confidence that these trends will remain strong.
We expect demand for wireless communication structures and components to accelerate throughout 2021.
Bringing reliable, high-speed broadband connectivity to people around the world is vital to elevating standards of living, safety and opportunity.
Our broad portfolio of towers and components positions us well to support world broadband connectivity initiatives, working with groups such as the Wireless Internet Service Providers Association and the American Connection Broadband Project Coalition to help bridge the the digital divide.
We're encouraged that both current and proposed legislation has allocated funding to support these efforts.
Our Coatings business closely follows industrial production trends, and general economic activity.
The drivers remain solid and the preservation of critical infrastructure and extending the life of steel fits well within our ESG principles.
And in irrigation, recent improvements in net farm income have improved grower sentiment, and tighter ending feed and protein stocks are keeping grain prices at sustained six and seven year highs.
As evidenced by our global backlog of over $350 million, this improved demand along with the strength across international markets and the large-scale multi-year project in Egypt, is providing a good line of sight for this year.
Building on our strategy as the technology leader, earlier this week we announced the acquisition of PivoTrac, a Texas-based Ag technology company, with products focused on telemetry and control.
This acquisition strengthens our footprint in the Texas Panhandle region, and adds more than 9,000 connections to our portfolio, growing our total connected machines to more than 123,000.
This technology will integrate well with our AgSense Platform going forward, and each connected device adds to the cumulative, positive effect of the recurring revenue stream that these solutions provide.
Turning to Slide 19, the summary.
Our focus on execution and the benefit of positive market tailwinds across our businesses have led to a great start this year, and these look to extend into 2022.
We expect solid operating performance and strong earnings per share accretion in 2021, and our teams are managing through the challenges of the current inflationary environment very well, through proactive pricing actions and the strength of our global supply chain.
We remain focused on profitable growth and return on invested capital improvement, while keeping our employees and communities safe and investing in our businesses for growth.
And as a reminder we are hosting a Virtual Investor Day on May 20th, where our leadership team will provide a deep dive into our businesses, and an update on our strategies to drive growth and long-term shareholder value creation.
We encourage you to register in advance using the link on our Investors page.
 Assistant:

Chosen response:
compname posts q1 earnings per share $2.57.
q1 earnings per share $2.57.
q1 sales rose 14.9 percent to $774.9 million.
sees q2 sales $805 million to $830 million.
reaffirming full year 2021 financial outlook.


Prompt:
Human: As usual, we'll start today's call with the CFO, who will review Vishay's second quarter 2021 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.
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 GAAP measures that we also provide.
I will focus on some highlights and key metrics.
Vishay reported revenues for Q2 of $819 million, a quarterly record.
Our earnings per share was $0.64 for the quarter, adjusted earnings per share was $0.61 for the quarter.
The only reconciling items between GAAP earnings per share and adjusted earnings per share are tax related.
There were no reconciling items impacting gross or operating margins.
Revenues in the quarter were $819 million, up by 7.1% from previous quarter and up by 40.8% compared to prior year.
Gross margin was 28%.
Operating margin was 15.3% There were no reconciling items to arrive at adjusted operating margin.
Adjusted earnings per share was $0.61.
EBITDA was $163 million or 19.9%.
There were no reconciling items to arrive at adjusted EBITDA.
Reconciling versus prior quarter, operating income quarter two 2021 compared to operating income for prior quarter based on $54 million higher sales or $55 million higher excluding exchange rate impacts, operating income increased by $28 million to $125 million in Q2 2021 from $97 million in Q1 2021.
The main elements were; average selling prices had a positive impact of $8 million, representing 1.0 ASP increase.
The volume increased with a positive impact of $22 million, equivalent to a 6.1% increase in volume.
Variable costs remained flat in total.
Cost reductions and volume related efficiencies offset increases in materials, services and metal prices.
Fixed costs remained flat in total, in line with our guidance.
Reconciling versus prior year, operating income quarter two 2021 compared to adjusted operating income in quarter two 2020 based on $237 million higher sales or $215 million excluding exchange rate impacts, adjusted operating income increased by $84 million to $125 million in Q2 2021 from $42 million in Q2 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 $101 million, representing a 36.4% increase.
Variable costs decreased with a positive impact of $6 million, primarily due to volume-related increased manufacturing efficiencies and cost reduction efforts, which more than offset higher metal prices, annual wage increases and higher tariffs.
Fixed costs increased with a negative impact of $19 million, primarily due to annual wage increases and higher incentive compensation partially offset by our restructuring programs.
Inventory impacts had a positive impact of $5 million, exchange rates had a negative impact of $6 million.
Selling, general and administrative expenses for the quarter were $104 million, in line with expectations.
For quarter three 2021, our expectations are approximately $104 million of SG&A expenses.
For the full year, our expectations are approximately $420 million at the exchange rates of quarter two.
The debt shown on the face of the balance sheet at quarter end is comprised of the convertible notes due 2025 net of debt issuance costs.
There were no amounts outstanding on a revolving credit facility at the end of the quarter.
However, we did use the revolver from time to time during Q2 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.
We had total liquidity of $1.6 billion at quarter end.
Cash and short-term investments comprised $856 million and there were no amounts outstanding on our $750 million credit facility.
Total shares outstanding at quarter end were 145 million.
The expected share count for earnings per share purposes for the third quarter 2021 is approximately 145.5 million.
Our convertible debt repurchase activity over the past three years, together with the adoption of the new convertible debt standard, significantly reduces the variability of our earnings per share share count.
Our US GAAP tax rate year-to-date was approximately 19%, which mathematically yields a rate of 20% for Q2.
We recorded benefits of $3.9 million for the quarter and $8.3 million year-to-date due to changes in tax regulations.
Our normalized effective tax rate, which excludes the unusual tax items, was approximately 24% for the quarter and 23% for the year-to-date periods.
We expect our normalized effective tax rate for the full year 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 as shift in income could result in significantly different results.
Also, a significant change in US tax laws or regulations could result in significantly different results.
Cash from operations for the quarter was $117 million.
Capital expenditures for the quarter were $32 million.
Free cash for the quarter was $85 million.
For the trailing 12 months, cash from operations was $365 million.
Capital expenditures were $135 million, split approximately for expansion $86 million, for cost reduction $9 million, for maintenance of business $40 million.
Free cash generation for the trailing 12-month period was $230 million.
The trailing 12-month period includes $30 million in cash taxes paid for both the 2020 and 2021 installment of the US Tax Reform Transition Tax.
The 2020 installment was paid in Q3 2020, whereas the 2021 installment was paid in Q2.
Vishay has consistently generated in excess of $100 million in cash flows from operations in each of the past 26 years and greater than $200 million for the past 19 years.
Backlog at the end of Q2 was $2.050 billion or 7.5 months of sales.
Inventories increased quarter-over-quarter by $31 million, excluding the exchange rate impacts.
Days of inventory outstanding were 76 days.
Days of sales outstanding for the quarter are 43 days.
Days payables outstanding for the quarter were 33 days, resulting in a cash conversion cycle of 86 days.
Also in the second quarter, the steep upturn of our business visible since October of last year continued.
We keep ramping up critical manufacturing capacities, increasing revenues and profits further.
Quite excellent plant efficiencies, the impact of price increases and our traditional discipline in fixed cost support the financial results.
Vishay in the second quarter achieved a gross margin of 28% of sales and operating margin of 15.3% of sales, earnings per share of $1.64 and adjusted earnings per share of $1.61.
We, in the second quarter, generated $85 million of free cash and we do expect another solid year of cash generation.
The economic environment for the electronics business continues to be exceptional with sales and backlogs at a historical high.
Virtually all markets are currently in excellent shape and supply chains continue to be rather depleted.
Despite all efforts to expand manufacturing capacities quickly, lead times for many product lines have stretched out rapidly and massively.
Price pressure presently is very low and selected price increases are being implemented, partially required to offset increased costs for metals and transportation.
Commenting on the regions.
We see continued strong performance in Asia and in the Americas.
Europe is somewhat lagging due to temporary supply problems in the automotive sector caused by a lack of ICs.
The Industrial segment drives demand in all the regions.
Distribution in all hemispheres continues to be extremely hungry for product.
Talking about distribution, global distribution continues to get overwhelmed with orders.
We see a record high since at least 15 years.
POS in the second quarter was 5% over prior quarter and a remarkable 45% over prior year.
After massive increases in the first quarter, POS increased further in all regions; by 3% in the Americas, by 6% in Asia and by 5% in Europe.
Global distribution inventory has stabilized on very low partially critically low levels.
Inventory turns of global distribution increased to quite extreme 4.4 from 4.3 in prior quarter; in the Americas, 2.1 after 1.9 in Q1 and 1.4 in prior year; in Asia, 7.4 turns after 6.7 in Q1 and 4.1 in prior year; 4.6 turns in Europe after 4.4 in Q1 and 3.0 in prior year.
Talking about the various industry segments we serve.
Automotive continues strong globally with OEMs continuing to struggle for replenishing vehicle inventory.
The increase of electronic content clearly accelerates.
There are some temporary supply programs leading to some artificial slowdown of the industry.
Still expect previously forecasted growth of 10% versus prior year in terms of vehicles.
We see an exceptional growth of the industrial sectors, which indicates an ongoing broad global upturn.
Factory automation and accelerated residential development, governmental investments in power generation and transmission systems as well as alternative energy systems are driving the demand.
Markets for computer and peripherals equipment are holding up well.
5G base station equipment continues to show promising growth in telecom.
Military spending continues reasonably strong commercial aerospace showing first signs of recovery.
The medical sector stabilized on a high level and consumer market sectors continued to show growth, driven by high rates of home construction, traditional television and gaming.
Coming to the business development for Vishay.
Due to high orders and backlogs and based on the continued increase of manufacturing capacities, Q2 sales excluding exchange rate impacts came in at a record and above the midpoint of our guidance.
We achieved sales of $819 million versus $765 million in prior quarter and $582 million in prior year.
Excluding exchange rate effects, sales in Q2 were up by $55 million or by 7% versus prior quarter and up by $215 million or 36% versus prior year.
Book-to-bill in the second quarter remained on a very high level of 1.38 after 1.67 in prior quarter, 1.41 for distribution after 1.89 in quarter one, 1.34 for OEMs after 1.41, 1.41 for semiconductors after 1.86 in Q1, 1.35 for passives after 1.50 in quarter one, 1.33 for the Americas after 1.42 in the first quarter, 1.29 for Asia after 1.86 in Q1, 1.54 for Europe after 1.62 in Q1.
Backlog in the second quarter climbed to another record high of 7.5 months after 6.8 months in Q1, 8.4 months in semis after 7.7 months in quarter one and 6.7 months in passives after 5.9 months last quarter.
There's practically no price decline, in fact there are some increases quarter-over-quarter.
Vis-a-vis prior quarter, we saw a price increase of 1% and versus prior year a slight loss of 0.3%.
In semis, these numbers were an increase of 1.5% versus prior quarter and a slight decrease of 0.7% versus prior year.
For passives, price increases plus 0.4% versus prior quarter and plus 0.1% versus prior year.
Some highlights of operations.
SG&A costs in the second quarter came in at $104 million according to expectations when excluding exchange rate effects.
Manufacturing fixed costs in the second quarter came in at $141 million and according to expectation without ex tax rate effects.
Total employment at the end of the second quarter was 22,500, 2% up from prior quarter at 22,060.
Excluding exchange rate impacts, inventories in the quarter increased by $31 million, $11 million in raw materials and $20 million in way-in-process and finished goods.
Inventory turns in the second quarter remained at a very high level of 4.8.
Capital spending in Q2 was $32 million versus $25 million in prior year, $20 million for expansion, $2 million for cost reduction and $10 million for the maintenance of business.
In view of the extremely high market demand, we are accelerating mid-term expansion programs noticeably.
We now expect for the year '21 capex of approximately $250 million.
We generated in the second quarter cash from operations of $365 million on a trailing 12-month basis.
We generated in the second quarter free cash of $230 million, again on a trailing 12-month basis.
Despite increased capex, we also for the current year expect a solid generation of free cash, quite in line with our tradition.
Let me come to our product lines and I start as always with resistors.
With resistors, we enjoy a very strong position in the auto, industrial, military and medical market segments.
We offer virtually all resistor technologies and are globally known as a reliable and high quality supplier of the broadest product range.
Vishay's traditional and historically growing business has recovered completely from the pandemic running at record levels now.
Sales in the quarter were $195 million, up by $8 million or 4% versus prior quarter and up by $47 million or 32% versus prior year, all excluding exchange rate impacts.
Book-to-bill ratio in the second quarter continued strong at 1.39 after 1.50 in prior quarter.
Backlog increased further to 6.6 months from 5.6 months in prior quarter.
Due to higher volume and quite excellent efficiencies in the plants, gross margin in the second quarter increased further to 30% of sales from 29% in prior quarter.
Inventory turns in the quarter remained at a very high level of 5.1.
Selling prices are increasing plus 0.5% versus prior quarter and plus 0.6% versus prior year.
We are in process to raise critical manufacturing capacities for resistor chips and for power wirebond substantially, opening also a new production site in China.
And we do expect a very successful year for resistors.
This business consists of power inductors and magnetics.
Since years, this is our fastest growing business we have in passives and represents one of the greater success stories of Vishay.
Exploiting the growing need for inductors in general, Vishay 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 their steady growth.
Sales of inductors in the second quarter were $86 million, up by $2 million or 3% versus prior quarter and up by $19 million or 29% versus prior year, all excluding exchange rate effects.
Book-to-bill ratio in the second quarter increased to 1.21 after 1.13 in prior quarter, backlog grew to 5.1 months from 4.5 in Q1.
Gross margin reached a quite excellent level of 34% of sales after 33% in the first quarter.
Inventory turns normalized to a level of 4.7, down from 5.1 in the first quarter.
We see a reduced price pressure.
We see price increases of 0.8% versus prior quarter and a decline of 2.2% versus prior year.
We are accelerating our next steps of capacity expansion for power inductors in order to get ahead of the demand curve.
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 fields of power transmission and of electro cars namely in Asia, especially in China.
Sales in the second quarter were $120 million, 13% above prior quarter and 36% above prior year without exchange rate effects.
Book-to-bill ratio in the second quarter remained at a high level of 1.37 after 1.73 in prior quarter.
Backlog increased to a record level of 7.7 months from 7.4 months in Q1.
Gross margin in the quarter improved further to 24% of sales coming from 23% in Q1.
Inventory turns in the quarter remained at 3.9.
Selling prices are increasing, plus 0.2% versus prior quarter, plus 1% versus prior year.
We also expect a good year for capacitors driven by large governmental projects in China by a solid mill business and a very friendly business environment in general.
Vishay's business with opto products consists of infrared emitters, receivers, sensors and couplers.
The business in 2020 experienced a significant recovery from disappointing results in prior years.
Also in opto, we see a strong acceleration of demand.
Sales in the quarter were $76 million, 3% below prior quarter, but 47% above prior year without exchange rate impacts.
Book-to-bill in the second quarter remained at a very high level of 1.69 after 1.66 in the first quarter.
Backlog continued to grow to an extreme high of 9.3 months after 7 months in Q1, partially due to COVID-related restrictions of manufacturing capacities in Malaysia.
This is the only place we incurred such restrictions.
Gross margin in the second quarter remained at an excellent level of 32% of sales after 33% in the first quarter.
I think we can say that opto is back to its historical profitability level.
We see more normal inventory turns of 5.8 in the quarter after 6.4 in Q1.
Also in the case of opto, selling prices are going up, plus 1.7% in prior quarter and plus 1.5% versus prior year.
And we are in process to modernize and expand the Heilbronn fab in Germany.
Diodes for Vishay represents a broad commodity business where we are the 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.
The business has started to exceed pre-pandemic levels.
Sales in the quarter were $175 million, up by $18 million or by 11% versus prior quarter and up by $47 million or 36% versus prior year without exchange rate effects.
There is a continued strong book-to-bill ratio of 1.45 in the quarter after 1.85 in the first quarter.
Backlog climbed to an extreme high of 8.9 months from 7.9 months in prior quarter.
Gross margin continued to improve to now 24% of sales as compared to 22% in Q1.
Inventory turns were at 4.7 after 4.8 in prior quarter.
Also for diode, selling prices are increasing by 1.7% versus prior quarter and by 0.2% versus prior year.
We decided for a substantial expansion of our in-house fab capacity in Taipei introducing at the same time the 8-inch technology relevant also of course for cost reduction.
As expected, diodes with a return to normal volumes has reached the pre-pandemic profitability levels.
Vishay is one of the market leaders in MOSFET transistors.
With MOSFETs, we enjoy a strong and growing market position in particular in automotive, which in view of an increasing use of MOSFETs in automotive will provide a successful future.
Demand has reached extreme levels and increases further.
Sales in the quarter were $168 million, a record level, 10% above prior quarter and 39% above prior year excluding exchange rate effects.
Book-to-bill ratio for MOSFETs in the quarter was 1.26 after 1.97 in the first quarter.
Backlog remained at an extreme level of 7.9 months as compared to 7.8 in Q1.
Due to a combination of higher volume, better prices and even better efficiencies, gross margin in the quarter increased noticeably to 28% of sales, up from 24% in prior quarter.
Inventory turns in the quarter increased further to 5.0 from 4.7 in Q1.
We see decreasing price pressure.
We have indeed increases of prices reasonably prior quarter of 1.2% and minus 2.5% versus prior year, much lower than normal.
MOSFETs remain key for Vishay's growth going forward.
Our industry and also Vishay continues to operate in a quite excellent economic environment.
There is an unstoppable global trend toward electronification that makes our future promising.
We are exploiting the present high demand to the best we can.
But beyond this, we expect a mid-term acceleration of the electronification worldwide.
We are preparing ourselves in terms of available machine capacities and will provide the capital required.
While enjoying higher growth, we will definitely keep our feet on the ground in terms of fixed costs, as we always did so in the past.
But we do plan to increase further our technical presence in the markets and we will increase critical R&D resources.
We will do our utmost to remain the same fair and service oriented supplier close to our customers we are known for.
The results for the third quarter look promising.
We guide to a sales range between $810 million and $850 million at a gross margin of 28.3%, plus/minus 15 basis points.
We'll now open the call to questions.
Ashley, please take the first question.
 Assistant:

Chosen response:
q2 adjusted earnings per share $0.61.
q2 earnings per share $0.64.
q2 revenue $819 million versus refinitiv ibes estimate of $821.1 million.
sees q3 revenue $810 million to $850 million.