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 September 30, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition 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 November 2, 1995 registrant had 51,239,826 shares of its
Common Stock and 7,232,035 shares of its Class B Common Stock
outstanding.
<PAGE>
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q SEPTEMBER 30, 1995
CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Balance Sheets - 3-4
September 30, 1995 and December 31, 1994
Consolidated Condensed Statements of 5
Operations - Three Months Ended
September 30, 1995 and 1994
Consolidated Condensed Statements of 6
Operations - Nine Months Ended
September 30, 1995 and 1994
Consolidated Condensed Statements of 7
Cash Flows - Nine Months Ended
September 30, 1995 and 1994
Notes to Consolidated Condensed 8-9
Financial Statements
Item 2. Management's Discussion and Analysis 10-12
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION 13
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
September 30 December 31
ASSETS 1995 1994
------------ -----------
CURRENT ASSETS
Cash and cash equivalents $33,275 $26,857
Accounts receivable 194,771 165,188
Inventories:
Finished goods 131,396 101,008
Work in process 90,475 94,005
Raw materials 119,569 108,594
Prepaid expenses and other
current assets 65,082 64,909
------------ -----------
TOTAL CURRENT ASSETS 634,568 560,561
PROPERTY AND EQUIPMENT - AT COST
Land 46,803 40,113
Buildings and improvements 188,992 171,689
Machinery and equipment 534,886 473,471
Construction in progress 85,859 48,689
Allowance for depreciation (242,006) (201,671)
------------ -----------
614,534 532,291
GOODWILL 227,794 226,534
OTHER ASSETS 18,287 14,573
------------ -----------
$1,495,183 $1,333,959
============ ===========
<PAGE>
September 30 December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
------------ -----------
CURRENT LIABILITIES
Notes payable to banks $18,203 $28,285
Trade accounts payable 60,580 63,318
Payroll and related expenses 47,435 39,155
Other accrued expenses 58,752 64,505
Income taxes 11,964 1,849
Current portion of long-term debt 36,899 35,127
------------ -----------
TOTAL CURRENT LIABILITIES 233,833 232,239
LONG-TERM DEBT 226,159 402,337
DEFERRED INCOME TAXES 43,520 39,889
OTHER LIABILITIES 18,941 19,177
ACCRUED RETIREMENT COSTS 81,258 75,229
STOCKHOLDERS' EQUITY
Common stock 5,124 2,257
Class B common stock 723 377
Capital in excess of par value 738,448 509,966
Retained earnings 122,793 53,734
Foreign currency
translation adjustment 30,596 4,584
Unearned compensation (402) (20)
Pension adjustment (5,810) (5,810)
------------ -----------
891,472 565,088
------------ -----------
$1,495,183 $1,333,959
============ ===========
See notes to consolidated condensed financial statements.
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited - In thousands except earnings per share)
Three Months Ended
September 30,
1995 1994
------------ -----------
Net sales $300,629 $260,963
Costs of products sold 221,364 196,036
------------ -----------
GROSS PROFIT 79,265 64,927
Selling, general, and
administrative expenses 39,586 37,185
Amortization of goodwill 1,622 1,489
------------ -----------
OPERATING INCOME 38,057 26,253
Other income (expense):
Interest expense (7,959) (7,556)
Other (322) 43
------------ -----------
(8,281) (7,513)
------------ -----------
EARNINGS BEFORE INCOME TAXES 29,776 18,740
Income taxes 7,444 4,179
------------ -----------
NET EARNINGS $22,332 $14,561
============ ===========
Net earnings per share $0.42 $0.29
============ ===========
Weighted average shares outstanding 53,392 49,997
See notes to consolidated condensed financial statements.
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited - In thousands except earnings per share)
Nine Months Ended
September 30,
1995 1994
------------ -----------
Net sales $926,374 $713,661
Costs of products sold 684,318 542,482
------------ -----------
GROSS PROFIT 242,056 171,179
Selling, general, and
administrative expenses 121,229 98,812
Amortization of goodwill 4,815 3,139
------------ -----------
OPERATING INCOME 116,012 69,228
Other income (expense):
Interest expense (24,851) (17,992)
Other (640) 76
------------ -----------
(25,491) (17,916)
------------ -----------
EARNINGS BEFORE INCOME TAXES 90,521 51,312
Income taxes 21,431 9,867
------------ -----------
NET EARNINGS $69,090 $41,445
============ ===========
Net earnings per share $1.31 $0.87
============ ===========
Weighted average shares outstanding 52,940 47,886
See notes to consolidated condensed financial statements.
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Nine Months Ended
September 30,
1995 1994
------------ -----------
OPERATING ACTIVITIES
Net earnings $69,090 $41,445
Adjustments to reconcile
net earnings to net cash
provided by operating activities:
Depreciation and amortization 51,498 40,995
Other 1,226 1,029
Changes in operating assets
and liabilities (46,500) (53,125)
------------ -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 75,314 30,344
INVESTING ACTIVITIES
Purchases of property
and equipment-net (104,151) (64,102)
Purchase of businesses,
net of cash acquired - (179,673)
------------ -----------
NET CASH USED IN
INVESTING ACTIVITIES (104,151) (243,775)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 207,689 343,249
Payments on long-term borrowings (393,484) (230,615)
Net (payments)proceeds
on short-term borrowings (11,164) 10,809
Proceeds from sale of common stock 230,863 109,817
------------ -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 33,904 233,260
Effect of exchange rate
changes on cash 1,351 490
------------ -----------
INCREASE IN CASH AND
CASH EQUIVALENTS 6,418 20,319
Cash and cash equivalents at
beginning of period 26,857 10,931
------------ -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $33,275 $31,250
============ ===========
See notes to consolidated condensed financial statements.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
September 30, 1995
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, 1994.
Note 2: Earnings Per Share
Earnings per share amounts for all periods reflect a 5% stock dividend
paid March 31, 1995 and a 2-for-1 stock split paid on June 16, 1995.
Earnings per share for the three and nine month periods ended September
30, 1995 reflect the weighted effect of the issuance of 2.79 million
shares of common stock in August 1994 and of 5.75 million shares of
common stock in September 1995.
Note 3: Public Stock Offering
In September 1995, the Company completed an offering of 5,750,000 shares
of its common stock and received net proceeds of $230,863,000. The
proceeds were used to prepay bank indebtedness.
Note 4: Acquisition
In July 1994, the Company purchased all of the capital stock of Vitramon,
Incorporated and Vitramon Limited U.K. (collectively, "Vitramon") for
$184,000,000 in cash. Vitramon is a leading producer of multi-layer
ceramic chip capacitors with manufacturing facilities primarily in the
United States, France, Germany and the United Kingdom. The results of
operations of Vitramon have been included in the Company's results from
July 1994.
Pro forma unaudited results of operations for the nine months ended
September 30, 1994 , assuming consummation of the Vitramon acquisition
and related financing as of January 1, 1994, is as follows (in thousands,
except per share data):
Pro Forma
Nine Months Ended
September 30, 1994
Net sales $ 782,344
Net earnings $ 47,528
Net earnings per share $ 0.90
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter and nine months ended September 30, 1995
increased $39,966,000 or 15.2% and $212,713,000 or 29.8%, respectively,
from the comparable periods of the prior year. The increase for the
quarter ended September 30, 1995 reflects the strong performance of
Vitramon and Vishay's other surface mount components businesses. The
increase in net sales for the nine months ended September 30, 1995
includes $87,753,000 of net sales of Vitramon for the first six months of
1995. Vitramon was acquired effective July 1, 1994.
In addition, the weakening of the U.S. dollar against foreign currencies
in the quarter and nine months ended September 30, 1995 in comparison to
the prior year's period resulted in increases in reported sales of
$10,481,000 and $46,276,000, respectively.
Net sales, exclusive of foreign currency fluctuations, increased 11.2%
over the prior year quarter. Net sales, exclusive of foreign currency
fluctuations and Vitramon sales for the first six months, increased 11.0%
for the nine months ended September 30, 1995. Net bookings for the third
quarter increased by 5.6% over the prior year quarter. Net bookings for
the nine months ended September 30, 1995, exclusive of Vitramon's
bookings for the first six months, increased by 17.0% over the
comparable prior year period.
Income statement captions as a percentage of sales and the effective tax
rates were as follows:
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
Costs of products sold 73.6 75.1 73.9 76.0
Gross profit 26.4 24.9 26.1 24.0
Selling, general and
administrative expenses 13.2 14.3 13.1 13.8
Operating income 12.7 10.1 12.5 9.7
Earnings before income taxes 9.9 7.2 9.8 7.2
Effective tax rate 25.0 22.3 23.7 19.2
Net earnings 7.4 5.6 7.5 5.8
<PAGE>
Costs of products sold for the quarter and nine months ended September
30, 1995 were 73.6% and 73.9%, of net sales, respectively, as compared to
75.1% and 76.0%, respectively, for the comparable prior year's period.
The factors contributing to this decrease included: i) the effect of the
peso devaluation, which contributed approximately $1,000,000 and
$2,800,000 to the gross profit for the quarter and nine months ended
September 30, 1995, ii) the fact that gross profits for Vitramon are
higher than Vishay's other operating companies, iii) Israeli government
grants of $3,693,000 and $9,633,000, for the quarter and nine months
ended September 30, 1995, respectively, as compared to $3,033,000 and
$7,190,000, respectively, for the comparable prior year's period, and iv)
an increase in production in Israel where labor costs are lower than in
most other regions in which Vishay manufactures. The increase in Israeli
government grants resulted primarily from an increase in the Company's
work force and capital investment in Israel.
Selling, general, and administrative expenses for the quarter and nine
months ended September 30, 1995 were 13.2% and 13.1% of net sales,
respectively, as compared to 14.3% and 13.8% for the comparable prior
year periods. These decreased percentages result primarily from the
increased sales volume. While management believes these percentages to be
acceptable, management continues to explore additional cost saving
opportunities.
Interest costs increased by $403,000 and $6,859,000, respectively, for
the quarter and nine months ended September 30, 1995 over the comparable
prior year periods as a result of increases in the floating rates of
Vishay's bank indebtedness and an overall increase in debt outstanding as
a result of the acquisition of Vitramon in July 1994 and purchases of
property and equipment. The net proceeds of $230,863,000 from a common
stock offering completed in September 1995, were used to prepay bank
indebtedness.
The effective tax rates for the quarter and nine months ended September
30, 1995 were 25.0% and 23.7%, respectively, compared to 22.3% and 19.2%
for the comparable prior year's period. The effective tax rate for
calendar year 1994 was 20.5%. The higher tax rates for the quarter and
nine months ended September 30, 1995 reflect increased earnings in higher
tax rate jurisdictions.
The continuing effect of low tax rates in Israel (as compared to the
statutory rate in the United States) has been to increase net earnings by
$4,595,000 and $3,883,000 for the quarters ended September 30, 1995 and
1994, respectively, and $12,790,000 and $9,825,000 for the nine month
periods ended September 30, 1995 and 1994, respectively. The period to
period increases are primarily a result of increased earnings for the
<PAGE>
Israeli operations as a result of increased production. The more
favorable Israeli tax rates are applied to specific approved projects and
normally continue to be available for a period of ten years. New projects
are continually being introduced.
Financial Condition
Cash flows from operations were $75,314,000 for the nine months ended
September 30, 1995 compared to $30,344,000 for the prior year's period.
Included in net cash provided by operating activities are cash payments
of $10,056,000 and $9,745,000 made in the first nine months of 1995 and
1994, respectively, for accruals the Company established in connection
with acquisitions. Net purchases of property and equipment for the nine
months ended September 30, 1995 were $104,151,000 compared to $64,102,000
in the prior year's period. This increase reflects the Company's on-going
program to purchase additional equipment to meet growing customer demand
for surface mount components. Net cash provided by financing activities
of $33,904,000 for the nine months ended September 30, 1995 includes
$230,863,000 of net proceeds from a common stock offering which were used
to prepay bank indebtedness, which had increased as a result of
borrowings used primarily to finance additions to property and
equipment.
The Company has established accruals relating to the Vitramon acquisition
of $12,876,000. These accruals, which are included in other accrued
expenses, will not affect future earnings but will require cash
expenditures.
The Company's financial condition at September 30, 1995 is strong, with
a current ratio of 2.7 to 1. The Company's ratio of long-term debt (less
current portion) to stockholders' equity was .25 to 1 at September 30,
1995 and .70 to 1 at December 31, 1994.
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
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) Reports on Form 8-K
None
<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/ Richard N. Grubb
Richard N. Grubb
Vice President, Treasurer
(Duly Authorized and Chief Financial
Officer)
Date: November 6, 1995
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