SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transaction period from to
Commission File Number 1-7416
VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 38-1686453
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
63 Lincoln Highway, Malvern, Pennsylvania 19355
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 644-1300
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
As of May 10, 1994 registrant had 17,656,340 shares of its Common
Stock and 3,574,973 shares of its Class B Common Stock outstanding.
<PAGE>
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q MARCH 31, 1994
CONTENTS
Page No.
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PART I. FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets - 3-4
March 31, 1994 and December 31, 1993
Consolidated Condensed Statements of 5
Operations - Three Months Ended
March 31, 1994 and 1993
Consolidated Condensed Statements of 6
Cash Flows - Three Months Ended
March 31, 1994 and 1993
Notes to Consolidated Condensed 7
Financial Statements
Management's Discussion and Analysis 8-9
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION 10
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VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
March 31 December 31
ASSETS 1994 1993
-------------- --------------
CURRENT ASSETS
Cash and cash equivalents $19,155,000 $10,931,000
Accounts receivable 151,297,000 125,284,000
Inventories:
Finished goods 80,706,000 85,783,000
Raw materials and
work in process 145,762,000 138,872,000
Prepaid expenses and
other current assets 38,241,000 33,365,000
-------------- --------------
TOTAL CURRENT ASSETS 435,161,000 394,235,000
PROPERTY AND EQUIPMENT - AT COST
Land 34,819,000 33,791,000
Buildings and improvements 140,677,000 136,432,000
Machinery and equipment 418,230,000 398,885,000
Allowance for depreciation (160,158,000) (149,004,000)
-------------- --------------
433,568,000 420,104,000
GOODWILL 120,695,000 118,286,000
OTHER ASSETS 14,266,000 15,481,000
-------------- --------------
$1,003,690,000 $948,106,000
============== ==============
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LIABILITIES AND March 31 December 31
STOCKHOLDERS' EQUITY 1994 1993
-------------- --------------
CURRENT LIABILITIES
Notes payable to banks $36,506,000 $22,695,000
Trade accounts payable 49,696,000 48,404,000
Payroll and related expenses 34,135,000 28,942,000
Other accrued expenses 52,609,000 54,112,000
Income taxes 4,866,000 3,740,000
Current portion of long-term debt 30,543,000 30,536,000
-------------- --------------
TOTAL CURRENT LIABILITIES 208,355,000 188,429,000
LONG-TERM DEBT 285,475,000 266,999,000
DEFERRED INCOME TAXES 25,053,000 26,080,000
OTHER LIABILITIES 21,384,000 24,081,000
ACCRUED RETIREMENT COSTS 70,285,000 66,014,000
STOCKHOLDERS' EQUITY
Common stock 1,764,000 1,763,000
Class B common stock 359,000 359,000
Capital in excess of par value 289,050,000 288,980,000
Retained earnings 118,507,000 105,849,000
Foreign currency
translation adjustment (9,173,000) (13,109,000)
Unearned compensation (90,000) (60,000)
Pension adjustment (7,279,000) (7,279,000)
-------------- --------------
393,138,000 376,503,000
-------------- --------------
$1,003,690,000 $948,106,000
============== ==============
See notes to consolidated condensed financial statements.
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VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
Three Months Ended
March 31
1994 1993
------------ ------------
Net sales $226,015,000 $227,500,000
Costs of products sold 175,215,000 177,566,000
------------ ------------
GROSS PROFIT 50,800,000 49,934,000
Selling, general,
and administrative expenses 30,176,000 30,608,000
Restructuring expense - 1,510,000
Unusual item - (2,000,000)
------------ ------------
OPERATING INCOME 20,624,000 19,816,000
Other income (expense):
Interest expense (5,040,000) (5,885,000)
Other 468,000 (22,000)
Amortization of goodwill (801,000) (610,000)
------------ ------------
(5,373,000) (6,517,000)
------------ ------------
EARNINGS BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 15,251,000 13,299,000
Income taxes 2,593,000 2,261,000
------------ ------------
EARNINGS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 12,658,000 11,038,000
Cumulative effect of accounting
change for income taxes - 1,427,000
------------ ------------
NET EARNINGS $12,658,000 $12,465,000
============ ============
Earnings per share:
Before cumulative effect
of accounting change $0.60 $0.52
Accounting change for income taxes - $0.07
----------- -----------
Net earnings $0.60 $0.59
=========== ===========
Weighted average
shares outstanding 21,230,000 21,226,000
See notes to consolidated condensed financial statements.
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VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31
1994 1993
OPERATING ACTIVITIES ------------ ------------
Net earnings $12,658,000 $12,465,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 12,997,000 12,129,000
Other, including cumulative
effect of accounting change (3,139,000) (1,052,000)
Changes in operating assets
and liabilities (21,941,000) (16,131,000)
NET CASH PROVIDED BY ------------ ------------
OPERATING ACTIVITIES 575,000 7,411,000
INVESTING ACTIVITIES
Purchases of property and
equipment-net (18,534,000) (16,909,000)
Purchase of businesses,
net of cash acquired - (1,646,000)
NET CASH USED IN ------------ ------------
INVESTING ACTIVITIES (18,534,000) (18,555,000)
FINANCING ACTIVITIES
Proceeds from
long-term borrowings 51,521,000 148,426,000
Payments on
long-term borrowings (37,348,000) (132,405,000)
Net increase in
short-term borrowings 12,054,000 13,053,000
NET CASH PROVIDED BY ------------ ------------
FINANCING ACTIVITIES 26,227,000 29,074,000
Effect of exchange rate
changes on cash (44,000) 50,000
INCREASE IN CASH AND ------------ ------------
CASH EQUIVALENTS 8,224,000 17,980,000
Cash and cash equivalents
at beginning of period 10,931,000 15,977,000
CASH AND CASH EQUIVALENTS ------------ ------------
AT END OF PERIOD $19,155,000 $33,957,000
============ ============
See notes to consolidated condensed financial statements.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
March 31, 1994
Note 1: Basis of Presentation
- -------------------------------
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with the instructions
to Form 10-Q and therefore do not include all information and
footnotes necessary for presentation of financial position, results
of operations, and cash flows required by generally accepted
accounting principles for complete financial statements. The
information furnished reflects all adjustments (consisting of
normal recurring adjustments) which are, in the opinion of
management, necessary for a fair summary of the financial position,
results of operations and cash flows for the interim periods
presented. The financial statements should be read in conjunction
with the financial statements and notes thereto filed with Form
10-K for the year ended December 31, 1993.
Note 2: Earnings Per Share
- ----------------------------
Earnings per share amounts for all periods presented reflect a 5%
stock dividend paid on June 11, 1993.
Note 3: Restructuring Charge and Unusual Item
- -----------------------------------------------
The operating results for the quarter ended March 31, 1993 include
restructuring expense of $1,510,000 relating to the downsizing of
the Company's French operations and income from unusual item of
$2,000,000 for a business interruption insurance recovery.
Note 4: Income Taxes
- ----------------------
Effective January 1, 1993, the Company changed its method of
accounting for income taxes from the deferred method to the
liability method required by FASB Statement No. 109, "Accounting
for Income Taxes". The cumulative effect of adopting Statement No.
109 as of January 1, 1993 was to increase net earnings by
$1,427,000, or $.07 per share.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Net sales for the quarter ended March 31, 1994 decreased by
$1,485,000 or .7% from the comparable period of the prior year. The
strengthening of the U.S. dollar against foreign currencies in
comparison to the prior year first quarter resulted in a decrease
of $5,400,000 in reported sales for the quarter ended March 31,
1994. Management believes that the U.S. and European economies are
showing signs of recovery. Net bookings for the quarter ended March
31, 1994 increased by 5% over the comparable period of the prior
year.
Costs of products sold for the quarter ended March 31, 1994 were
77.5% of net sales as compared to 78.1% for the comparable period
of the prior year. Costs of products sold have been reduced by
government grants of $1,821,000 and $296,000 for the quarters ended
March 31, 1994 and 1993, respectively. Exclusive of government
grants, costs of products sold were comparable at 78.3% and 78.2%
of sales for the quarters ended March 31, 1994 and 1993,
respectively.
Selling, general, and administrative expenses for the quarter ended
March 31, 1994 were 13.4% of net sales compared to 13.5% for the
comparable period of the prior year. While we believe these
percentages to be acceptable, we are continuing to explore
additional cost saving opportunities.
A restructuring charge of $1,510,000 incurred during the quarter
ended March 31, 1993 related to the Company's decision to downsize
its French operations as a result of that country's business
climate. The Company recognized as income during the quarter ended
March 31, 1993 an insurance recovery of $2,000,000 for lost profits
from a business interruption insurance claim. Such recoveries
ultimately amounted to $7,221,000 for the entire 1993 calendar
year.
Interest costs decreased by $845,000 for the quarter ended
March 31, 1994 as a result of a lower average borrowing rate
resulting from a change in the Company's mix of borrowings
throughout the U.S. and Europe as compared to the prior year's
first quarter.
Other income for the quarter ended March 31, 1994 increased by
$490,000 over the comparable period of the prior year. The increase
was largely due to foreign currency gains, which were $317,000 for
the quarter ended March 31, 1994 as compared to foreign currency
losses of $660,000 for the prior year quarter.
The effective tax rate for the quarters ended March 31, 1994 and
1993 was 17.0%. The effective tax rate for calendar year 1993,
exclusive of the effect of nontaxable insurance proceeds, was
18.6%. The estimated 1994 rate anticipates the effect of doing
increased business in lower tax rate jurisdictions (especially
Israel).
Included in net earnings for the first quarter of 1993 is a one-
time tax benefit $1,427,000 resulting from the adoption of FASB
Statement No. 109, "Accounting for Income Taxes".
Financial Condition
- -------------------
Cash flows from operations were $575,000 for the quarter ended
March 31, 1994 compared to $7,411,000 for the prior year's quarter.
The decrease in net cash provided by operating activities in
comparison to the prior year first quarter results primarily from
$6,500,000 of cash payments made in the first quarter of 1994 for
restructuring. Purchases of property and equipment were $18,534,000
compared to $16,909,000 in the prior year first quarter. The
Company is continuing to add equipment to meet increased customer
demand for surface mount components. Net cash provided by financing
activities of $26,227,000 for the quarter ended March 31, 1994 was
used primarily to finance the additions to property and equipment.
The Company's financial condition at March 31, 1994 is strong, with
a current ratio of 2.1 to 1. The Company's ratio of long-term debt
to stockholders' equity was .7 to 1 at March 31, 1994 and
December 31, 1993.
Management believes that available sources of credit, together with
cash expected to be generated from operations, will be sufficient
to satisfy the Company's anticipated financing needs for working
capital and capital expenditures during the next twelve months.
Inflation
- ---------
Normally, inflation does not have a significant impact on the
Company's operations. The Company's products are not generally
sold on long-term contracts. Consequently, selling prices, to the
extent permitted by competition, can be adjusted to reflect cost
increases caused by inflation.
<PAGE>
VISHAY INTERTECHNOLOGY, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Not applicable
(b) Reports on Form 8-K
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
VISHAY INTERTECHNOLOGY, INC.
/s/Robert A. Freece
------------------------------------
Robert A. Freece
Vice President, Treasurer
(Duly Authorized and Chief Financial
Officer)
Date: May 11, 1994
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