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, 1996
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 3, 1996 registrant had 51,161,076 shares of its Common
Stock and 7,222,035 shares of its Class B Common Stock outstanding.
<PAGE>
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q MARCH 31, 1996
CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Balance Sheets - 3-4
March 31, 1996 and December 31, 1995
Consolidated Condensed Statements of 5
Operations - Three Months Ended
March 31, 1996 and 1995
Consolidated Condensed Statements of 6
Cash Flows - Three Months Ended
March 31, 1996 and 1995
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 1996 1995
---------- ----------
CURRENT ASSETS
Cash and cash equivalents $21,581 $19,584
Accounts receivable 190,088 180,383
Inventories:
Finished goods 168,549 148,846
Work in process 85,320 92,166
Raw materials 127,211 121,180
Prepaid expenses and
other current assets 73,917 78,039
---------- ----------
TOTAL CURRENT ASSETS 666,666 640,198
PROPERTY AND EQUIPMENT - AT COST
Land 45,530 46,073
Buildings and improvements 205,723 197,164
Machinery and equipment 622,753 603,175
Construction in progress 82,943 76,564
Allowance for depreciation (266,580) (253,748)
---------- ----------
690,369 669,228
GOODWILL 215,059 218,102
OTHER ASSETS 14,752 15,803
---------- ----------
$1,586,846 $1,543,331
========== ==========
<PAGE>
LIABILITIES AND March 31 December 31
STOCKHOLDERS' EQUITY 1996 1995
---------- ----------
CURRENT LIABILITIES
Notes payable to banks $26,486 $22,174
Trade accounts payable 53,502 66,942
Payroll and related expenses 47,169 43,790
Other accrued expenses 51,644 51,102
Income taxes 14,784 7,083
Current portion of long-term debt 37,855 37,821
---------- ----------
TOTAL CURRENT LIABILITIES 231,440 228,912
LONG-TERM DEBT 241,703 228,610
DEFERRED INCOME TAXES 41,574 42,044
OTHER LIABILITIES 67,619 59,866
ACCRUED RETIREMENT COSTS 74,636 76,046
STOCKHOLDERS' EQUITY
Common stock 5,115 5,114
Class B common stock 722 722
Capital in excess of par value 734,668 734,316
Retained earnings 174,411 146,370
Foreign currency
translation adjustment 21,990 28,487
Unearned compensation (398) (364)
Pension adjustment (6,634) (6,792)
---------- ----------
929,874 907,853
---------- ----------
$1,586,846 $1,543,331
========== ==========
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
March 31
1996 1995
---------- ----------
Net sales $310,660 $310,284
Costs of products sold 225,579 231,019
---------- ----------
GROSS PROFIT 85,081 79,265
Selling, general,
and administrative expenses 40,374 41,120
Amortization of goodwill 1,632 1,600
---------- ----------
OPERATING INCOME 43,075 36,545
Other income (expense):
Interest expense (4,293) (8,319)
Other (158) (13)
---------- ----------
(4,451) (8,332)
---------- ----------
EARNINGS BEFORE INCOME TAXES 38,624 28,213
Income taxes 10,583 6,179
---------- ----------
NET EARNINGS $28,041 $22,034
========== ==========
Net earnings per share $0.48 $0.42
========== ==========
Weighted average shares outstanding 58,364 52,702
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
1996 1995
---------- ----------
OPERATING ACTIVITIES
Net earnings $28,041 $22,034
Adjustments to reconcile
net earnings to net cash
provided by operating activities:
Depreciation and amortization 19,345 16,871
Other 10,087 5,492
Changes in operating
assets and liabilities (30,757) (35,114)
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 26,716 9,283
INVESTING ACTIVITIES
Purchases of property
and equipment-net (43,901) (36,645)
---------- ----------
NET CASH USED IN
INVESTING ACTIVITIES (43,901) (36,645)
FINANCING ACTIVITIES
Net proceeds from
revolving credit lines 14,945 29,500
Proceeds from long-term borrowings 3,096 21
Payments on long-term borrowings (3,072) (3,942)
Net proceeds (payments)
on short-term borrowings 4,487 (1,607)
---------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 19,456 23,972
Effect of exchange rate
changes on cash (274) 1,276
---------- ----------
INCREASE (DECREASE)IN CASH
AND CASH EQUIVALENTS 1,997 (2,114)
Cash and cash equivalents at
beginning of period 19,584 26,857
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $21,581 $24,743
========== ==========
See notes to consolidated condensed financial statements.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
March 31, 1996
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, 1995.
Note 2: Earnings Per Share
Earnings per share amounts for all periods reflect a 2-for-1 stock split
distributed on June 16, 1995. Earnings per share for the three month
period ended March 31, 1996 reflect the issuance of 5.75 million shares
of common stock in September 1995.
Note 3: Reclassifications
Certain prior year amounts have been reclassified to conform with the
current presentation.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter ended March 31, 1996 were $310,660,000 compared
to $310,284,000 from the comparable period of the prior year. The flat
net sales are indicative of the general slowdown in the European economy
and the abrupt worldwide drop in the personal computer and
telecommunications markets which started at the end of last year.
The weakening of the U.S. dollar against foreign currencies in the first
quarter of 1996 in comparison to the prior year's quarter resulted in an
increase in reported sales of $1,478,000.
Income statement captions as a percentage of sales and the effective tax
rates were as follows:
Three Months Ended
March 31
1996 1995
Costs of products sold 72.6 % 74.5 %
Gross profit 27.4 25.5
Selling, general and
administrative expenses 13.0 13.3
Operating income 13.9 11.8
Earnings before income taxes 12.4 9.1
Effective tax rate 27.4 21.9
Net earnings 9.0 7.1
Costs of products sold for the quarter ended March 31, 1996 were 72.6% of
net sales, as compared to 74.5% for the comparable prior year period.
This decrease reflects an increase in production in Israel where labor
costs are lower than in most other regions in which Vishay manufactures
and the continued shift to higher margin products.
Israeli government grants, recorded as a reduction of costs of goods
sold, were $2,140,000 for the quarter ended March 31, 1996 as compared to
$2,589,000 for the comparable prior year period. 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. Deferred income at
March 31, 1996 relating to Israeli government grants was $39,317,000 as
compared to $30,849,000 at December 31, 1995.
Selling, general, and administrative expenses for the quarter ended
March 31, 1996 were 13.0% of net sales, as compared to 13.3% for the
comparable prior year period. While management believes these
percentages to be acceptable, management continues to explore additional
cost saving opportunities.
Interest costs decreased by $4,026,000 for the quarter ended March 31,
1996 over the comparable prior year period primarily as a result of the
net proceeds of $230,279,000 from a common stock offering completed in
September 1995 which were used to prepay bank indebtedness.
The effective tax rate for the quarter ended March 31, 1996 was 27.4%
compared to 21.9% for the comparable prior year period. The effective tax
rate for calendar year 1995 was 24.6%. The higher tax rate for the
quarter ended March 31, 1996 reflects increased earnings in higher tax
rate countries.
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
$4,373,000 and $4,072,000 for the quarter ended March 31, 1996 and 1995,
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 $26,716,000 for the quarter ended March
31, 1996 compared to $9,283,000 for the prior year's period. Included in
net cash provided by operating activities is $3,857,000 and $3,778,000 of
cash payments made in the first quarter of 1996 and 1995, respectively,
for accruals the Company established in connection with acquisitions. Net
purchases of property and equipment for the quarter ended March 31, 1996
were $43,901,000 compared to $36,645,000 in the prior year's period. This
increase reflects the Company's on-going program to purchase additional
equipment to meet anticipated customer demand for surface mount
components. Net cash provided by financing activities of $19,456,000 for
the quarter ended March 31, 1996 includes increased borrowings used
primarily to finance the additions to property and equipment.
The Company has established accruals relating to the Vitramon acquisition
of $11,735,000. 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, 1996 is strong, with a
current ratio of 2.9 to 1. The Company's ratio of long-term debt (less
current portion) to stockholders' equity was .26 to 1 at March 31, 1996
and .25 to 1 at December 31, 1995.
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/ Richard N. Grubb
-------------------------
Richard N. Grubb
Vice President, Treasurer
(Duly Authorized and Chief Financial
Officer)
Date: May 3, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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