SECURITIES AND EXCHANGE COMMISSION
Room 1004
450 Fifth Street, NW
Washington, DC 20549
RE: Quarterly Report on Form 10-Q
Gentlemen:
We are transmitting for filing the quarterly report of Vishay
Intertechnology, Inc. On Form 10-Q for the quarter ended March 31,
1995.
Sincerely yours.
Vishay Intertechnology, Inc.
/s/ Richard N. Grubb
-----------------------------
Richard N. Grubb
Vice President, Treasurer<PAGE>
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, 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 May 5, 1995 registrant had 22,642,133 shares of its Common
Stock and 3,716,047 shares of its Class B Common Stock outstanding.
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q MARCH 31, 1995
CONTENTS
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Balance Sheets - 3-4
March 31, 1995 and December 31, 1994
Consolidated Condensed Statements of 5
Operations - Three Months Ended
March 31, 1995 and 1994
Consolidated Condensed Statements of 6
Cash Flows - Three Months Ended
March 31, 1995 and 1994
Notes to Consolidated Condensed 7
Financial Statements
Item 2. Management's Discussion and Analysis 8-10
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION 11
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
March 31 December 31
ASSETS 1995 1994
---------- ----------
CURRENT ASSETS
Cash and cash equivalents $24,743 $26,857
Accounts receivable 201,242 165,188
Inventories:
Finished goods 113,678 101,008
Work in process 93,983 94,005
Raw materials 121,754 108,594
Prepaid expenses and
other current assets 67,711 64,909
---------- ----------
TOTAL CURRENT ASSETS 623,111 560,561
PROPERTY AND EQUIPMENT - AT COST
Land 47,413 40,113
Buildings and improvements 180,229 171,689
Machinery and equipment 505,782 473,471
Construction in progress 64,335 48,689
Allowance for depreciation (222,141) (201,671)
---------- ----------
575,618 532,291
GOODWILL 232,595 226,534
OTHER ASSETS 18,192 14,573
---------- ----------
$1,449,516 $1,333,959
========== ==========
<PAGE>
March 31 December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
---------- ----------
CURRENT LIABILITIES
Notes payable to banks $27,887 $28,285
Trade accounts payable 67,921 63,318
Payroll and related expenses 46,196 39,155
Other accrued expenses 65,051 64,505
Income taxes 6,735 1,849
Current portion of long-term debt 36,889 35,127
---------- ----------
TOTAL CURRENT LIABILITIES 250,679 232,239
LONG-TERM DEBT 434,952 402,337
DEFERRED INCOME TAXES 42,468 39,889
OTHER LIABILITIES 21,961 19,177
ACCRUED RETIREMENT COSTS 82,389 75,229
STOCKHOLDERS' EQUITY
Common stock 2,264 2,257
Class B common stock 372 377
Capital in excess of par value 510,595 509,966
Retained earnings 75,737 53,734
Foreign currency translation adjustment 34,220 4,584
Unearned compensation (311) (20)
Pension adjustment (5,810) (5,810)
---------- ----------
617,067 565,088
---------- ----------
$1,449,516 $1,333,959
========== ==========
See notes to consolidated condensed financial statements.
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited - In thousands except earnings per share)
Three Months Ended
March 31
1995 1994
---------- ----------
Net sales $310,284 $226,015
Costs of products sold 231,019 175,215
---------- ----------
GROSS PROFIT 79,265 50,800
Selling, general, and
administrative expenses 41,120 30,176
Amortization of goodwill 1,600 801
---------- ----------
OPERATING INCOME 36,545 19,823
Other income (expense):
Interest expense (8,319) (5,040)
Other (13) 468
---------- ----------
(8,332) (4,572)
---------- ----------
EARNINGS BEFORE INCOME TAXES 28,213 15,251
Income taxes 6,179 2,593
---------- ----------
NET EARNINGS $22,034 $12,658
========== ==========
Net earnings per share $0.84 $0.54
========== ==========
Weighted average shares outstanding 26,351 23,406
See notes to consolidated condensed financial statements.
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Three Months Ended
March 31
1995 1994
---------- ----------
OPERATING ACTIVITIES
Net earnings $22,034 $12,658
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 16,871 12,997
Other 1,855 (3,139)
Changes in operating assets
and liabilities (35,114) (21,941)
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 5,646 575
INVESTING ACTIVITIES
Purchases of property
and equipment-net (33,008) (18,534)
---------- ----------
NET CASH USED IN
INVESTING ACTIVITIES (33,008) (18,534)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 80,131 51,521
Payments on long-term borrowings (54,552) (37,348)
Net increase (decrease) in
short-term borrowings (1,607) 12,054
---------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 23,972 26,227
Effect of exchange rate
changes on cash 1,276 (44)
---------- ----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,114) 8,224
Cash and cash equivalents
at beginning of period 26,857 10,931
---------- ----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $24,743 $19,155
========== ==========
See notes to consolidated condensed financial statements.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
March 31, 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 presented reflect 5% stock
dividends paid on June 13, 1994 and March 31, 1995. Earnings per share
for the three month period ended March 31, 1995 reflect the issuance of
2.79 million shares of common stock in August 1994.
Note 3: 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 three months ended
March 31, 1994, assuming consummation of the Vitramon acquisition and
related financing as of January 1, 1994, is as follows (in thousands,
except net earnings per share):
Pro Forma
Three Months Ended
March 31, 1994
------------------
Net sales $ 261,523
Net earnings $ 16,721
Net earnings per share $ 0.64
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Net sales for the quarter ended March 31, 1995 increased $84,269,000 or
37% from the comparable period of the prior year. The increase reflects
the acquisition of Vitramon in July 1994 and the strong performance of
Vishay's surface mount components businesses. Net sales of Vitramon were
$43,698,000 for the quarter ended March 31, 1995. Net sales, exclusive of
Vitramon, increased by $40,571,000 or 18% for the quarter ended March 31,
1995.
In addition, the weakening of the U.S. dollar against foreign currencies
in the first quarter of 1995 in comparison to the prior year's quarter
resulted in an increase in reported sales of $16,632,000.
Net sales, exclusive of Vitramon and foreign currency fluctuations, in
the United States and Europe increased 11% over the first quarter of the
prior year. Net bookings, exclusive of Vitramon, for the quarter ended
March 31, 1995 increased by 22.3% over the comparable prior year period.
Net bookings of Vitramon for the quarter ended March 31, 1995 increased
by 31.3% over the prior year's quarter.
Income statement captions as a percentage of sales and the effective tax
rates were as follows:
Three Months Ended
March 31
1995 1994
------ ------
Costs of products sold 74.5 77.5
Gross profit 25.5 22.5
Selling, general and
administrative expenses 13.3 13.4
Operating income 11.8 8.8
Earnings before income taxes 9.1 6.7
Effective tax rate 21.9 17.0
Net earnings 7.1 5.6
Costs of products sold for the quarter ended March 31, 1995 were 74.5% of
net sales, as compared to 77.5% for the comparable prior year period. The
factors contributing to this decrease included: i) the effect of the peso
devaluation, which contributed approximately $900,000 to the gross profit
for the quarter ended March 31, 1995, ii) the fact that gross profits for
Vitramon were higher than Vishay's other operating companies, iii)
Israeli government grants of $2,589,000 for the quarter ended March 31,
1995, as compared to $1,821,000 for the comparable prior year 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 in Israel. Future grants and other
incentive programs offered to the Company by the Israeli government will
likely depend on the Company's continuing to increase capital investment
and the number of the Company's employees in Israel.
Selling, general, and administrative expenses for the quarter ended
March 31, 1995 were 13.3% of net sales, as compared to 13.4% for the
comparable prior year period. While management believes these
percentages to be acceptable, management continues to explore additional
cost saving opportunities.
Interest costs increased by $3,279,000 for the quarter ended March 31,
1995 over the comparable prior year period as a result of an increase in
the floating rates of Vishay's bank indebtedness and an overall increase
in debt incurred for the acquisition of Vitramon and purchases of
property and equipment.
The effective tax rate for the quarter ended March 31, 1995 was 21.9%
compared to 17.0% for the comparable prior year period. The effective tax
rate for calendar year 1994 was 20.5%. The higher tax rate for the
quarter ended March 31, 1995 reflects the inclusion of Vitramon earnings
which tend to be generated in higher tax 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
$4,072,000 and $2,521,000 for the quarter ended March 31, 1995 and 1994,
respectively. This period to period increase is primarily a result of
increased earnings for the Israeli operations. 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 $5,646,000 for the quarter ended March
31, 1995 compared to $575,000 for the prior year's period. Included in
net cash provided by operating activities is $3,778,000 and $6,500,000 of
cash payments made in the first quarter of 1995 and 1994, respectively,
for accruals the Company established in connection with acquisitions. Net
purchases of property and equipment for the quarter ended March 31, 1995
were $33,008,000 compared to $18,534,000 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 $23,972,000 for the quarter
ended March 31, 1995 includes increased borrowings used primarily to
finance the additions to property and equipment.
The Company has established accruals relating to the Vitramon acquisition
of $14,045,000. These accruals, which are included in other accrued
expenses, will not affect future earnings but will require cash
expenditures over the next twelve months.
The Company's financial condition at March 31, 1995 is strong, with a
current ratio of 2.5 to 1. The Company's ratio of long-term debt (less
current portion) to stockholders' equity was .7 to 1 at March 31, 1995
and 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
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
27. Financial Data Schedule
(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/ Richard N. Grubb
----------------------------
Richard N. Grubb
Vice President, Treasurer
(Duly Authorized and Chief Financial
Officer)
Date: May 5, 1995
-----------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VISHAY
INTERTECHNOLOGY, INC.'S QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 24,743
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<RECEIVABLES> 212,049
<ALLOWANCES> 10,807
<INVENTORY> 329,415
<CURRENT-ASSETS> 623,111
<PP&E> 797,759
<DEPRECIATION> 222,141
<TOTAL-ASSETS> 1,449,516
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<COMMON> 2,264
0
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<OTHER-SE> 614,803
<TOTAL-LIABILITY-AND-EQUITY> 1,449,516
<SALES> 310,284
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