SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] 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 of (I.R.S. Employer
incorporation or organization) Identification No.)
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 August 11, 1997 registrant had 56,451,517 shares of its Common Stock and
7,931,898 shares of its Class B Common Stock outstanding.
<PAGE>
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q JUNE 30, 1997
CONTENTS
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Balance Sheets - 3-4
June 30, 1997 and December 31, 1996
Consolidated Condensed Statements of 5
Operations - Three Months Ended
June 30, 1997 and 1996
Consolidated Condensed Statements of 6
Operations - Six Months Ended June
30, 1997 and 1996
Consolidated Condensed Statements of 7
Cash Flows - Six Months Ended
June 30, 1997 and 1996
Notes to Consolidated Condensed 8-9
Financial Statements
Item 2. Management's Discussion and Analysis 10-14
of Financial Condition and Results of
Operations
PART II. OTHER INFORMATION 15-16
-2-
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
----------- ------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $37,192 $20,945
Accounts receivable 174,613 163,164
Inventories:
Finished goods 158,719 182,722
Work in process 77,637 73,606
Raw materials 90,078 100,418
Prepaid expenses and other current assets 82,421 82,310
----------- -----------
TOTAL CURRENT ASSETS 620,660 623,165
PROPERTY AND EQUIPMENT - AT COST
Land 40,260 43,705
Buildings and improvements 218,136 222,743
Machinery and equipment 696,636 695,084
Construction in progress 52,329 57,891
Allowance for depreciation (332,694) (308,761)
----------- -----------
674,667 710,662
GOODWILL 190,982 201,574
OTHER ASSETS 28,578 20,646
----------- -----------
$1,514,887 $1,556,047
=========== ===========
</TABLE>
-3-
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996
-------- ---------
CURRENT LIABILITIES
<S> <C> <C>
Notes payable to banks $35,872 $31,212
Trade accounts payable 36,738 33,930
Payroll and related expenses 43,905 35,973
Other accrued expenses 45,785 55,381
Income taxes 16,774 7,076
Current portion of long-term debt 26,597 25,394
----------- -----------
TOTAL CURRENT LIABILITIES 205,671 188,966
LONG-TERM DEBT 175,227 229,885
DEFERRED INCOME TAXES 33,435 33,113
DEFERRED INCOME 60,869 58,570
OTHER LIABILITIES 28,039 30,534
ACCRUED RETIREMENT COSTS 63,096 69,749
STOCKHOLDERS' EQUITY
Common stock 5,645 5,373
Class B common stock 793 756
Capital in excess of par value 911,837 825,949
Retained earnings 61,892 107,762
Foreign currency translation adjustment (27,431) 9,106
Unearned compensation (753) (370)
Pension adjustment (3,433) (3,346)
----------- -----------
948,550 945,230
----------- -----------
$1,514,887 $1,556,047
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
-4-
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited - In thousands except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1997 1996
--------- ---------
<S> <C> <C>
Net sales $272,661 $273,502
Costs of products sold 207,031 201,638
--------- ---------
GROSS PROFIT 65,630 71,864
Selling, general, and administrative expenses 33,698 38,466
Restructuring expenses 0 24,280
Amortization of goodwill 1,499 1,630
--------- ---------
OPERATING INCOME 30,433 7,488
Other income (expense):
Interest expense (3,564) (4,569)
Other 837 1,022
--------- ---------
(2,727) (3,547)
--------- ---------
EARNINGS BEFORE INCOME TAXES 27,706 3,941
Income taxes 7,758 158
--------- ---------
NET EARNINGS $19,948 $3,783
========= =========
Net earnings per share $0.31 $0.06
========= =========
Weighted average shares outstanding 64,369 64,368
</TABLE>
See notes to consolidated condensed financial statements.
-5-
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited - In thousands except earnings per share)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
-----------------------
<S> <C> <C>
Net sales $545,923 $584,162
Costs of products sold 414,689 427,217
--------- ---------
GROSS PROFIT 131,234 156,945
Selling, general, and administrative expenses 67,617 78,841
Restructuring expenses 0 24,280
Amortization of goodwill 3,016 3,260
--------- ---------
OPERATING INCOME 60,601 50,564
Other income (expense):
Interest expense (7,265) (8,862)
Other 1,384 863
--------- ---------
(5,881) (7,999)
--------- ---------
EARNINGS BEFORE INCOME TAXES 54,720 42,565
Income taxes 15,114 10,741
--------- ---------
NET EARNINGS $39,606 $31,824
========= =========
Net earnings per share $0.62 $0.49
========= =========
Weighted average shares outstanding 64,363 64,358
</TABLE>
See notes to consolidated condensed financial statements.
-6-
<PAGE>
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Six Months Ended
June 30,
1997 1996
------- -------
OPERATING ACTIVITIES
Net earnings $39,606 $31,824
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 39,566 38,486
Other 2,555 19,227
Changes in operating assets and liabilities 10,457 (40,867)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 92,184 48,670
INVESTING ACTIVITIES
Purchases of property and equipment-net (34,812) (77,546)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (34,812) (77,546)
FINANCING ACTIVITIES
Net (payments) proceeds on revolving credit lines (38,179) 82,568
Proceeds from long-term borrowings 241 3,375
Payments on long-term borrowings (8,043) (56,236)
Net proceeds on short-term borrowings 8,072 14,176
-------- --------
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES (37,909) 43,883
Effect of exchange rate changes on cash (3,216) (877)
-------- --------
INCREASE IN CASH AND
CASH EQUIVALENTS 16,247 14,130
Cash and cash equivalents at beginning of period 20,945 19,584
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $37,192 $33,714
======== ========
See notes to consolidated condensed financial statements.
-7-
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
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, 1996.
Note 2: Earnings Per Share
Earnings per share amounts for all periods reflect a 5% stock dividend paid on
June 9, 1997.
Note 3: Acquisitions
On July 17, 1997, the Company consummated its acquisition of 65% of Lite-On
Power Semiconductor Corporation, a Republic of China (Taiwan) company ("LPSC"),
and a member of Taiwan's Lite-On Group of companies, for a net purchase price of
US$130 million.
LPSC produces diodes, primarily in the Far East, with manufacturing facilities
in Taipei, Taiwan; Shanghai, China; and Lee's Summit, Missouri. LPSC also owns
approximately 40.2% of Diodes, Inc. (AMEX: DIO), located in Westlake,
California. Diodes is a U.S. public company traded on the American Stock
Exchange.
Diodes are discrete semiconductor components used to convert electrical currents
from AC to DC and are used in all electronic equipment that requires such
conversion.
Pursuant to the Stock Purchase Agreement, dated April 25, 1997, among LPSC,
Silitek Corporation ("Silitek"), Lite-On Technology Corporation, Dyna Investment
Co., Ltd., Lite-On Inc. and other shareholders as Sellers, and the Company, as
Purchaser (the "Stock Purchase Agreement"), the Company, through two Singapore
entities, acquired approximately 100% of the issued and outstanding shares of
capital stock of LPSC for cash consideration of US$200 million.
-8-
<PAGE>
The purchase was made by a Singapore company (the "Joint Venture Company"),
whose capital stock at the time of the acquisition was 50% owned directly by the
Company, and 50% owned by another Singapore company (the "Holding Company"),
which at the time was a wholly owned subsidiary of the Company. The purchase
price was funded by current availability under the Company's existing credit
facilities, which were amended as of June 30, 1997 to reflect a number of
technical modifications necessary to permit the LPSC acquisition and the Joint
Venture described below.
Concurrently with the consummation of the acquisition, pursuant to the terms of
the Joint Venture Agreement, dated April 25, 1997, between the Company and a
company formed by Silitek and certain other shareholders of LPSC, Lite-On JV
Corporation ("JV"), which agreement was amended as of July 17, 1997 (as amended,
the "Joint Venture Agreement"), JV purchased from the Company 35% of its
interest in the Holding Company and 17.5% of its interest in the Joint Venture
Company for consideration of $70 million.
In connection therewith, JV received stock appreciation rights ("SARs") in the
Company, which represent the right to receive the increase in value on the
equivalent of 1,625,000 shares of the Company's stock above $23 per share.
Subject to certain annual and other adjustments, the Company may redeem the SARs
if the Company's stock trades above $43 per share. At that price, the SAR's
would entitle JV to 755,813 shares of the Company's common stock.
The Joint Venture Agreement also defines the terms of the management of LPSC and
its subsidiaries and the agreement between the Company and JV to market the
Company's products in Asia and LPSC's products throughout the world.
The foregoing summaries of the Stock Purchase Agreement and the Joint Venture
Agreement (including the amendment thereto) are qualified in their entirety by
reference to the text of each of such agreements, which are filed as exhibits to
the Company's report on Schedule 13D, filed on July 25, 1997, which agreements
are incorporated herein by reference.
The summary of the amendment to the Company's credit facilities is qualified in
its entirety by reference to the text of such amendment, which is filed as an
exhibit hereto and which is incorporated herein by reference.
-9-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Income statement captions as a percentage of sales and the effective tax rates
were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
Costs of products sold 75.9% 73.7% 76.0% 73.1%
Gross profit 24.1 26.3 24.0 26.9
Selling, general and
administrative expenses 12.4 14.1 12.4 13.5
Operating income 11.2 2.7 11.1 8.7
Earnings before income taxes 10.2 1.4 10.0 7.3
Effective tax rate 28.0 4.0 27.6 25.2
Net earnings 7.3 1.4 7.3 5.4
Net sales for the quarter and six months ended June 30, 1997 decreased $841,000
or .3% and $38,239,000 or 6.5%, respectively, from the comparable periods of the
prior year. The decrease in net sales is related to a number of factors
including price reductions in the Company's "commodity" products (tantalum,
ceramic and resistor chips). As a result of competitive pressures, prices of
these products have been reduced between 10% and 20% in the past year. In
addition, the strengthening of the U.S. dollar against foreign currencies for
the quarter and six months ended June 30, 1997 in comparison to the prior year's
periods, resulted in decreases in reported sales of $12,005,000 and $24,286,000,
respectively.
Costs of products sold for the quarter and six months ended June 30, 1997 were
75.9% and 76.0% of net sales, respectively, as compared to 73.7% and 73.1%,
respectively, for the comparable prior year periods. Gross profits for the
quarter and six months ended June 30, 1997 were negatively affected by a
difficult pricing environment.
Israeli government grants, recorded as a reduction of costs of products sold,
were $2,801,000 and $5,425,000 for the quarter and six months ended June 30,
1997, respectively, as compared to $2,061,000 and $4,201,000 for the comparable
prior year periods. 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 June 30, 1997
-10-
<PAGE>
relating to Israeli government grants was $60,869,000 as compared to $58,570,000
at December 31, 1996.
Selling, general, and administrative expenses for the quarter and six months
ended June 30, 1997 were 12.4% of net sales, as compared to 14.1% and 13.5%,
respectively, for the comparable prior year periods. Selling, general and
administrative expenses decreased by $4,768,000 and $11,224,000, respectively,
as compared to the prior year periods, as a result of the cost reduction program
instituted in 1996.
The Company recorded a pretax restructuring charge of $24,280,000 ($16,000,000
after tax) in the quarter ended June 30, 1996 in connection with a reduction of
approximately 1,300 employees in the Company's worldwide workforce. The Company
also closed or downsized several facilities in North America and Europe.
Interest costs decreased by $1,005,000 and $1,597,000 for the quarter and six
months ended June 30, 1997, respectively, from the comparable prior year periods
primarily as a result of reductions of bank indebtedness using cash generated
from operating activities.
The effective tax rate for the six months ended June 30, 1997 was 27.6% as
compared to 25.2% for the comparable prior year period. The effective tax rate
for calendar year 1996 was 25.2%. The lower tax rate for the quarter ended June
30, 1996 was due primarily to the restructuring charges recorded in the higher
tax rate countries, where the Company conducts its business. 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 $2,931,000 and $4,165,000
for the quarters ended June 30, 1997 and 1996, respectively, and $4,451,000 and
$8,538,000 for the six month periods ended June 30, 1997 and 1996, respectively.
The more favorable Israeli tax rates are applied to specific approved projects
and normally continue to be available for a period of ten years.
Financial Condition
Cash flows from operations were $92,184,000 for the six months ended June 30,
1997 compared to $48,670,000 for the prior year's period. The increase in cash
flows from operations is primarily due to a decrease in inventory for the six
months ended June 30, 1997 as compared to an increase in inventory for the six
months ended June 30, 1996. Net purchases of property and equipment for six
months ended June 30, 1997 were $34,812,000 compared to $77,546,000 in the prior
year's period. This decrease reflects the fact that the Company has
substantially completed its current restructuring/expansion program. Net cash
used by financing
-11-
<PAGE>
activities of $37,909,000 for the six months ended June 30, 1997 includes
$45,981,000 used to pay down bank indebtedness.
The Company incurred a pretax restructuring charge of $38,030,000 for the year
ended December 31, 1996. Approximately $28,953,000 of these charges relate to
employee termination costs covering approximately 2,600 technical, production,
administrative and support employees located in the United States, Canada,
France and Germany. As of June 30, 1997, approximately 2,199 employees have been
terminated and $19,585,000 of the termination costs have been paid. The
restructuring plan is expected to be completed by the end of 1997.
The Company's financial condition at June 30, 1997 is strong, with a current
ratio of 3.02 to 1. The Company's ratio of long-term debt (less current portion)
to stockholders' equity was .18 to 1 at June 30, 1997 and .24 to 1 at December
31, 1996.
As discussed in Note 3 to the financial statements, the Company financed the
cash portion ($130 million) of the Lite-On acquisition from current availability
under the Company's credit facilities.
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.
Safe Harbor Statement
From time to time, information provided by the Company, including but not
limited to statements in this report, or other statements made by or on behalf
of the Company, may contain "forward-looking" information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements involve a number of risks and
uncertainties. The Company's actual results could differ materially from those
discussed in the forward-looking statements. The cautionary statements set forth
below identify important factors that could cause actual results to differ
materially from those in any forward-looking statements made by or on behalf of
the Company.
o The Company offers a broad variety of products and services to its
customers. Changes in demand for, or in the mix of, products and
services comprising revenues could cause actual operating results to
vary from those expected.
o The Company's future operating results are dependent, in part, on its
ability to develop, produce and market new and innovative products, to
convert existing products to surface mount devices and to customize
certain products to meet customer requirements. There are numerous
risks inherent in this complex process, including rapid technological
changes and the need for the Company to timely bring to market new
products and applications to meet customers' changing needs.
o The Company operates in a highly competitive environment, which
includes significant competitive pricing pressures and intense
competition for entry into new markets.
o A slowdown in demand for passive electronic components or recessionary
trends in the global economy in general or in specific countries or
regions where the Company sells the bulk of its products, such as the
U.S., Germany, France or the Pacific Rim, could adversely impact the
Company's results of operations.
o Much of the orders in the Company's backlog may be canceled by its
customers without penalty. Customers may on occasion double and triple
order components from multiple sources to insure timely delivery when
backlog is particularly long. The Company's results of operations may
be adversely impacted if customers were to cancel a material portion
of such orders.
-12-
<PAGE>
o Approximately 50% of the Company's revenues are derived from
operations and sales outside the United States. As a result, currency
exchange rate fluctuations, inflation, changes in monetary policy and
tariffs, potential changes in laws and regulations affecting the
Company's business in foreign jurisdictions, trade restrictions or
prohibitions, intergovernmental disputes, increased labor costs and
reduction or cancellation of government grants, tax benefits or other
incentives could impact the Company's results of operations.
o Specifically, as a result of the increased production by the Company's
operations in Israel over the past several years, the low tax rates in
Israel (as compared to the statutory rates in the U.S.) have had the
effect of increasing the Company's net earnings. In addition, the
Company takes advantage of certain incentive programs in Israel in the
form of grants designed to increase employment in Israel. Any
significant increase in the Israeli tax rates or reduction or
elimination of any of the Israeli grant programs could have an adverse
impact on the Company's results of operations.
o The Company may experience underutilization of certain plants and
factories in high labor cost regions and capacity constraints in
plants and factories located in low labor cost regions, resulting
initially in production inefficiencies and higher costs. Such costs
include those associated with work force reductions and plant closings
in the higher labor cost regions and start-up expenses, manufacturing
and construction delays, and increased depreciation costs in
connection with the start of production in new plants and expansions
in lower labor cost regions. Moreover, capacity constraints may limit
the Company's ability to continue to meet demand for any of the
Company's products.
-13-
<PAGE>
o When the Company restructures its operations in response to changing
economic conditions, particularly in Europe, labor unrest or strikes
may occur, which could have an adverse effect on the Company.
o The Company's results of operations may be adversely impacted by (i)
difficulties in obtaining raw materials, supplies, power, natural
resources and any other items needed for the production of the
Company's products; (ii) the effects of quality deviations in raw
materials, particularly tantalum powder, palladium and ceramic
dielectric materials; and (iii) the effects of significant price
increases for tantalum or palladium, or an inability to obtain
adequate supplies of tantalum or palladium from the limited number of
suppliers.
o The Company's historic growth in revenues and net earnings have
resulted in large part from its strategy to expand through
acquisitions. However, there is no assurance that the Company will
find or consummate transactions with suitable acquisition candidates
in the future.
o The Company's strategy also focuses on the reduction of selling,
general and administrative expenses through the integration or
elimination of redundant sales offices and administrative functions at
acquired companies and achievement of significant production cost
savings through the transfer and expansion of manufacturing operations
to lower cost regions such as Israel, Mexico, Portugal and the Czech
Republic. The Company's inability to achieve any of these goals could
have an adverse effect on the Company's results of operations.
o The Company may be adversely affected by the costs and other effects
associated with (i) legal and administrative cases and proceedings
(whether civil, such as environmental and product-related, or
criminal); (ii) settlements, investigations, claims, and changes in
those items; (iii) developments or assertions by or against the
Company relating to intellectual property rights and intellectual
property licenses; and (iv) adoption of new, or changes in, accounting
policies and practices and the application of such policies and
practices.
o The Company's results of operations may also be affected by (i)
changes within the Company's organization, particularly at the
executive officer level, or in compensation and benefit plans; and
(ii) the amount, type and cost of the financing which the Company
maintains, and any changes to the financing.
o The inherent risk of environmental liability and remediation costs
associated with the Company's manufacturing operations may result in
large and unforseen liabilities.
o The Company's operations may be adversely impacted by (i) the effects
of war or severe weather or other acts of God on the Company's
operations, including disruptions at manufacturing facilities; (ii)
the effects of a disruption in the Company's computerized ordering
systems; and (iii) the effects of a disruption in the Company's
communications systems.
-14-
<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
(a) The Company held its Annual Meeting of Stockholders on May
19, 1997.
(b) Proxies for the meeting were solicited pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as
amended. There was no solicitation in opposition to
management's nominees for the directors as listed in the
definitive proxy statement of the Company dated April 18,
1997, and all such nominees were elected.
(c) Briefly described below is each matter voted upon at the
Annual Meeting of Stockholders.
(i) Election of the following individuals to hold office as
Directors of the Company until the next Annual Meeting
of Stockholders:
Total Class A Common Stock voted was 42,279,706.
Broker
For Against Abstain Non-Votes
--- ------- ------- ---------
Felix Zandman 38,719,943 3,559,763 0 0
Donald G. Alfson 38,754,312 3,525,394 0 0
Avi D. Eden 38,754,371 3,525,335 0 0
Robert A. Freece 38,754,126 3,525,580 0 0
Richard N. Grubb 38,757,381 3,522,325 0 0
Eli Hurvitz 38,588,788 3,690,918 0 0
Gerald Paul 38,755,571 3,524,135 0 0
Edward Shils 38,743,009 3,536,697 0 0
Luella B. Slaner 38,743,617 3,536,089 0 0
Mark I. Solomon 38,757,902 3,521,804 0 0
Jean-Claude Tine 38,742,890 3,536,816 0 0
Total Class B Common Stock voted was
7,518,487 in favor, 0 against, 0 abstained,
and 0 broker non-votes.
(ii) Approval of an amendment to the Company's Certificate
of Incorporation to increase the number of shares of
common stock which the Company is authorized to issue
from 65,000,000 shares to 75,000,000 shares. Total
Class A Common Stock voted was 41,341,673 in favor,
770,606
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<PAGE>
against, 167,427 abstained, and 0 broker non-votes.
Total Class B Common Stock voted was 7,518,487 in
favor, 0 against, 0 abstained, and 0 broker non-votes.
(iii) Ratification of the appointment of Ernst & Young LLP,
independent certified public accountants, to audit the
books and accounts of the Company for the calendar year
ending December 31, 1997. Total Class A Common Stock
voted was 42,026,010 in favor, 145,388 against, 108,308
abstained, and 0 broker non-votes. Total Class B Common
Stock voted was 7,518,487 in favor, 0 against, 0
abstained, and 0 broker non-votes.
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description of Exhibit
- ------ ----------------------
3.1 -- Certificate of Amendment of Composite Amended and Restated
Certificate of Incorporation of Vishay Intertechnology,
Inc (the "Corporation").*
4.1 -- Stock Purchase Agreement among LPSC, Silitek Corporation, Lite-On
Technology Corporation, Dyna Investment Co., Ltd., Lite-On Inc.
and other shareholders as Sellers and the Corporation as
Purchaser, incorporated by reference to Exhibit A to the
Corporation's Schedule 13D filed on July 25, 1997.
10.1 -- Joint Venture Agreement between the Corporation and Lite-On JV
Corporation (the "Joint Venture Agreement"), incorporated by
reference to Exhibit B to the Corporation's Schedule 13D filed
on July 25, 1997.
10.2 -- Amendment to the Joint Venture Agreement, incorporated by
reference to Exhibit C to the Corporation's Schedule 13D filed
on July 25, 1997.
10.3 -- Third Amendment to Vishay Loan Agreement, dated as of June 30,
1997.*
27 -- Financial Data Schedule.*
(b) Reports on Form 8-K
Not applicable
- ----------
*Filed herewith.
-16-
<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
Executive Vice President, Treasurer
(Duly Authorized and Chief Financial
Officer)
Date: August 12, 1997
-17-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
3.1 -- Certificate of Amendment of Composite Amended and Restated
Certificate of Incorporation of Vishay Intertechnology,
Inc (the "Corporation").*
4.1 -- Stock Purchase Agreement among LPSC, Silitek Corporation, Lite-On
Technology Corporation, Dyna Investment Co., Ltd., Lite-On Inc.
and other shareholders as Sellers and the Corporation as
Purchaser, incorporated by reference to Exhibit A to the
Corporation's Schedule 13D filed on July 25, 1997.
10.1 -- Joint Venture Agreement between the Corporation and Lite-On JV
Corporation (the "Joint Venture Agreement"), incorporated by
reference to Exhibit B to the Corporation's Schedule 13D filed
on July 25, 1997.
10.2 -- Amendment to the Joint Venture Agreement, incorporated by
reference to Exhibit C to the Corporation's Schedule 13D filed
on July 25, 1997.
10.3 -- Third Amendment to Vishay Loan Agreement, dated as of June 30,
1997.*
27 -- Financial Data Schedule.*
- ----------
*Filed herewith.
CERTIFICATE OF AMENDMENT
OF
COMPOSITE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VISHAY INTERTECHNOLOGY, INC.
ADOPTED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 242 OF THE
DELAWARE GENERAL CORPORATION LAW
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation")
is Vishay Intertechnology, Inc.
2. The Composite Amended and Restated Certificate of Incorporation of
the Corporation is hereby amended by striking out the first paragraph of Article
Fourth thereof and by substituting in lieu of said paragraph of said Article the
following new paragraph:
"FOURTH: SECTION 1. CLASSES AND NUMBER OF SHARES. The total number of
shares of all classes of stock which the Corporation shall have authority
to issue is 91,000,000 shares. The classes and the aggregate number of
shares of stock of each class which the Corporation shall have authority to
issue are as follows:
(i) 75,000,000 shares of Common Stock, $0.10 par value per share
(hereinafter the "Common Stock");
(ii) 15,000,000 shares of Class B Common Stock, $0.10 par value per
share (hereinafter the "Class B Stock"); and
(iii) 1,000,000 shares of Preferred Stock, $1.00 par value per share,
with such rights, privileges, restrictions and preferences as the Board of
Directors may authorize from time to time (hereinafter the "Preferred
Stock")."
<PAGE>
3. The amendment of the Composite Amended and Restated Certificate of
Incorporation herein certified has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Signed and attested to on May 22, 1997.
/s/ Richard N. Grubb
--------------------
Name: Richard N. Grubb
Title: Executive Vice President,
Treasurer and Chief
Financial Officer
Attest:
/s/ William J. Spires
- ----------------------
Name: William J. Spires
Title: Vice President and
Secretary
EXECUTION COPY
- --------------------------------------------------------------------------------
THIRD AMENDMENT TO
VISHAY LOAN AGREEMENT
DATED AS OF JUNE 30, 1997
COMERICA BANK, AS AGENT
NATIONSBANK OF NORTH CAROLINA, N.A., AS CO-AGENT
BERLINER HANDELS-UND FRANKFURTER BANK, AS LEAD MANAGER
================================================================================
<PAGE>
THIRD AMENDMENT
THIS THIRD AMENDMENT ("Third Amendment") is made as of this 30th day of
June, 1997 by and among Vishay Intertechnology, Inc., a Delaware corporation
("Company"), Comerica Bank, successor by merger to Manufacturers Bank, N.A.,
formerly known as Manufacturers National Bank of Detroit ("Comerica"), the banks
signatory hereto (individually, a "Bank" and collectively, "Banks"), and
Comerica Bank, as agent for the Banks (in such capacity, "Agent").
RECITALS:
A. Company, Agent and the Banks entered into that certain Amended and
Restated Vishay Intertechnology, Inc. $302,500,000 Revolving Credit and Term
Loan Agreement dated as of July 18, 1994 (as amended by that certain First
Amendment dated as of June 27, 1995 and that certain Second Amendment dated as
of March 14, 1996, the "Vishay Loan Agreement") under which the Banks renewed
and extended (or committed to extend) credit to the Company and the Permitted
Borrowers, as set forth therein.
B. At the Company's request, Agent and the Banks have agreed with the
Company and the Permitted Borrowers to make certain amendments to the terms and
conditions of the Vishay Loan Agreement, but only on the terms and conditions
set forth in this Third Amendment.
NOW, THEREFORE, Company, the Permitted Borrowers, Agent and the Banks
agree:
1. Section 1 of the Vishay Loan Agreement is amended as follows:
(a) Section 1.67 (the definition of "Fixed Charge Coverage
Ratio") is amended and restated in its entirety as follows:
"1.67 'Fixed Charge Coverage Ratio' shall mean a ratio, (i)
the numerator of which shall be equal to the Operating Income of
the Company plus depreciation and amortization, each for the
preceding 12-month period ending on the date of determination
(and determined in accordance with GAAP), minus Capital
Expenditures of the Company during such 12-month period and (ii)
the denominator of which shall be the Interest Expense of the
Company for such 12-month period, in each case determined in
accordance with GAAP."
(b) Section 1.79 (the definition of "Intercompany Loan") and
Section 1.80 (the definition of "Intercompany Loans,
1
<PAGE>
Advances or Investments") are amended to replace each reference to the
words "100% Subsidiary" contained therein with the words "any
Subsidiary or Joint Venture, more than 50% of the share capital of
which is owned, directly or indirectly, by the Company".
(c) New Sections 1.86A, 1.86B and 1.86C (defining "Lite-On Joint
Venture Agreement", "Lite-On Joint Venture Documents" and "LPSC") are
added, immediately after Section 1.86, as follows:
"1.86A 'Lite-On Joint Venture Agreement' shall mean that
certain Joint Venture Agreement dated April 25, 1997 by and
between the Company and Lite-On [JV Co.], a company formed under
the laws of the Republic of China, relating to the acquisition by
the Company of LPSC, as amended (subject to the terms hereof),
from time to time.
"1.86B 'Lite-On Documents' shall mean the Lite-On Joint
Venture Agreement, that certain Stock Purchase Agreement dated
April 25, 1997 by and among the Company and the shareholders of
LPSC, and that certain Stock Appreciation Right Agreement dated
as of ____________, 1997 by and between the Company and Lite-On
[JV CO.], each as amended (subject to the terms hereof) from time
to time.
"1.86C 'LPSC' shall mean Lite-On Power Semiconductor
Corporation, a company formed under the laws of the Republic of
China."
(d) Section 1.108 (the definition of "Permitted Transfer") is
amended to replace the word "and" in the eighteenth line thereof
(immediately preceding clause (iv) of said Section) with a comma and
to add a new clause (v) beginning in the twenty-fifth line thereof
(immediately preceding the proviso), as follows:
"and (v) the transfer to Lite-On [JV Co.], of up to a 35%
interest in the joint venture company to be established under
Section 2.1 of the Lite-On Joint Venture Agreement, for the price
and on the other terms and conditions set forth therein and in
the other Lite-On Documents;"
(e) Section 1.153 is amended to add, following the words "joint
stock company," (in the second line thereof), the words "limited
liability company, partnership".
2. Section 7 of the Vishay Loan Agreement is amended as follows:
(a) Section 7.4 is amended and restated in its entirety, as
follows:
2
<PAGE>
"7.4 Tangible Net Worth. Maintain, and cause its
Subsidiaries to maintain, Tangible Net Worth which on a
Consolidated basis will at no time be less than Five Hundred
Million Dollars ($500,000,000), plus the sum of the Net
Income Adjustment and the Equity Offering Adjustment."
(b) Sections 7.5A and 7.5B are amended and restated in their
entirety, as follows:
"7.5 Leverage Ratio. Maintain, and cause its
Subsidiaries to maintain, a Leverage Ratio which on a
Consolidated basis will at no time exceed 3.25 to 1.0."
(c) Section 7.6 is amended and restated in its entirety, as
follows:
"7.6 Fixed Charge Coverage Ratio. Maintain, and cause
its Subsidiaries to maintain, a Fixed Charge Coverage Ratio
which on a Consolidated basis will at no time be less than
2.0 to 1.0."
3. Section 8 of the Vishay Loan Agreement is amended, as follows:
(a) Section 8.2 is amended to delete from the second line
thereof, the word "acquisition,".
(b) Section 8.4(b) is amended to add, following the word
"excluding", in the second line thereof, the words "indebtedness to".
(c) Section 8.6 is amended to redesignate existing subparagraphs
(b) and (c) as subparagraphs (c) and (d), respectively, and to add a
new subparagraph (b) to said Section 8.6, as follows:
"(b) Cash dividends by any non-100% Subsidiary or any Joint
Venture, provided that such dividends are paid to each
holder of share capital therein (including Company or
any of its other Subsidiaries) on a pro rata basis
(based on the relative amounts of share capital held by
each such holder) and provided further that such
dividends are paid to the Company or its other
Subsidiaries on substantially the same (or better)
terms as (and contemporaneously with) any dividends
paid to Persons other than the Company and its
Subsidiaries."
3
<PAGE>
(d) Section 8.7(d) is amended and restated in its entirety, as
follows:
"(d) Intercompany Loans, Advances or Investments without regard
to any repayment of such loans, advances or investments
(other than the repayment or recovery of capital or
principal), provided that both before and after giving
effect to any such loans, advances or investments, no
Default or Event of Default has occurred and is continuing
under this Agreement."
(e) Section 8.7(e) is amended and restated in its entirety, as
follows:
"(e) loans, advances or investments (without regard to any
repayment of such loans, advances or investments, other than
the repayment of capital or principal) to any Joint Venture
or Subsidiary, including without limitation guaranties by
the Company or any Subsidiary (valued on the basis of the
aggregate amount of indebtedness covered by a guaranty) of
third-party indebtedness of any such Joint Venture or
Subsidiary, which loans, advances or investments are not
otherwise permitted under this Section 8.7, in an aggregate
amount at any time outstanding not to exceed five percent
(5%) of Tangible Net Worth;"
(f) Section 8.12 is amended and restated in its entirety, as
follows:
"8.12 Amendment of Stock Purchase Agreement or
Lite-On Documents. Amend, modify or otherwise alter (or suffer
to be amended, modified or altered) any of the material terms
and conditions of the Stock Purchase Agreement or the Lite-On
Documents in any respect which is materially adverse to the
Company, as determined by Company in its reasonable
discretion, without the prior written approval of Agent and
the Majority Banks; provided that promptly following any
amendment to any of such documents, Company shall provide
Agent with copies of such amendments, for distribution to the
Banks."
4. Section 13.8(c) (establishing a 50% minimum hold requirement) is
amended to delete the second proviso (set forth in the fifteenth through
eighteenth lines thereof) from said Section 13.8(c) and Section 13.8(d)(ii) is
amended and restated in its entirety, as follows:
4
<PAGE>
"(ii) each assignment shall be in a minimum amount equal to
the lesser of (A) a Bank's entire remaining interest under the
Loan Agreements (and the Notes issued thereunder) or (B) Ten
Million Dollars ($10,000,000) or, as applicable, the Alternative
Currency Equivalent thereof;".
5. Company and each of the Permitted Borrowers ratify and confirm, as
of the date hereof, each of the representations and warranties set forth in
Sections 6.1 through 6.21, inclusive, of the Vishay Loan Agreement (as amended
by this Third Amendment), and acknowledge that such representations and
warranties are and shall remain continuing representations and warranties during
the entire life of the Vishay Loan Agreement.
6. Except as specifically set forth above, this Third Amendment shall
not be deemed to amend or alter in any respect the terms and conditions of the
Vishay Loan Agreement, any of the Notes issued thereunder, or any of the other
Loan Documents, or to constitute a waiver by Banks or Agent of any right or
remedy under the Vishay Loan Agreement, any of the Notes issued thereunder or
any of the other Loan Documents.
7. This Third Amendment shall become effective as of June 30, 1997,
subject to the satisfaction by Company and each of the Permitted Borrowers of
the following conditions on or before July __, 1997:
(a) Agent shall have received counterpart originals of this Third
Amendment duly executed and delivered by the Majority Banks, the
Company and the Permitted Borrowers and in form satisfactory to Agent
and the Majority Banks; and
(b) Agent shall have received from Company and the Permitted
Borrowers, as applicable, copies, certified by a duly authorized
officer to be true and complete as of the date hereof, of records of
all action taken by Company and the Permitted Borrowers, as the case
may be, to authorize the execution and delivery of this Third
Amendment.
8. Unless otherwise expressly defined to the contrary herein, all
capitalized terms used in this Third Amendment shall have the meaning set forth
in the Vishay Loan Agreement.
9. By executing this Third Amendment, each of the Permitted Borrowers
consents to and acknowledges and agrees to be bound by the terms and conditions
of this Third Amendment.
10. This Third Amendment may be executed in counterpart, in accordance
with Section 13.10 of the Vishay Loan Agreement.
* * *
[SIGNATURES CONTAINED ON SUCCEEDING PAGES]
5
<PAGE>
IN WITNESS WHEREOF, Company, the Banks and Agent have each caused this
Third Amendment to be executed by their respective duly authorized officers or
agents, as applicable, all as of the date first set forth above.
COMPANY: AGENT:
VISHAY INTERTECHNOLOGY, INC. COMERICA BANK, as Agent
By: /s/ Richard N. Grubb By: /s/ Dan M. Roman
-------------------- --------------------
Its: Executive Vice President Its: Vice President
63 Lincoln Highway One Detroit Center
Malvern, Pennsylvania 19355 500 Woodward Avenue
Detroit, Michigan 48226
Attention: National Division
6
<PAGE>
BANKS:
COMERICA BANK
By: /s/ Dan M. Roman
-----------------
Dan M. Roman
Its: Vice President
NATIONSBANK OF NORTH
CAROLINA, N.A.
By: /s/ Yousuf Omar
---------------
Yousuf Omar
Its: Senior Vice President
SIGNET BANK/MARYLAND
By: /s/ Janice E. Godwin
--------------------
Janice E. Godwin
Its: Vice President
CORESTATES BANK, N.A.,
formerly known as and
continuing to do business
under the name of THE
PHILADELPHIA NATIONAL BANK
By: /s/ Kathleen Stucy
--------------------
Kathleen Stucy
Its: Senior Vice President
BERLINER HANDELS-UND
FRANKFURTER BANK
By: /s/ Dana L. McDougall
- ------------------------
Its: Vice President
BANK HAPOALIM, B.M.
By: /s/ Carl Kopfinger
------------------
Carl Kopfinger
Its: Vice President
BANK LEUMI le-ISRAEL, B.M.
By: /s/ Y. Apelker
- ------------------
Its: Authorized Representative
ABN AMRO BANK N.V. NEW YORK
BRANCH
By: /s/ Nancy W. Lanzoni
--------------------
Nancy W. Lanzoni
Its: Group Vice President
and
By: /s/ John M. Kinney
- ----------------------
John M. Kinney
Its: Assistant Vice President
7
<PAGE>
CREDIT LYONNAIS NEW YORK
BRANCH
By: /s/ Robert Ivosevich
--------------------
Robert Ivosevich
Its: Senior Vice President
CREDIT SUISSE
By: /s/ David Finney
----------------
David Finney
Its: Managing Director
AND
By: /s/ Tom Muoio
- -----------------
Tom Muoio
Its: Vice President
FLEET NATIONAL BANK, formerly
known as SHAWMUT BANK, N.A.
By: Authorized Representative
-------------------------
ACKNOWLEDGED AND AGREED
BY THE PERMITTED BORROWERS:
VISHAY EUROPE GmbH
By: /s/ Richard N. Grubb
--------------------
Richard N. Grubb
Its: Authorized Representative
DRALORIC ELECTRONIC GmbH
By: /s/ Richard N. Grubb
--------------------
Richard N. Grubb
Its: Authorized Representative
8
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