===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
-----------------------------------
Date of Report: July 22, 1998
Date of Earliest Event Reported: July 22, 1998
GENERAL SEMICONDUCTOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-5442 13-3575653
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
10 Melville Park Road
Melville, New York 11747
(Address of principal executive offices)
Registrant's telephone number, including area code: (516) 847-3000
Item 5. Other Events.
------------
On July 22, 1998, the registrant issued the press release filed as
Exhibit 99.1 hereto.
Item 7. Financial Statements and Exhibits.
---------------------------------
Exhibit Description
------- -----------
99.1 Press Release issued July 22, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
Dated: July 22, 1998.
GENERAL SEMICONDUCTOR, INC.
By: /s/ Andrew M. Caggia
-----------------------------------
Andrew M. Caggia
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description
------- -----------
99.1 Press Release issued July 22, 1998
Exhibit 99.1
[General Semiconductor, Inc. Letterhead]
FOR IMMEDIATE RELEASE CONTACT: Pam Jameson
(516) 847-3169
GENERAL SEMICONDUCTOR ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
MELVILLE, NY (July 22, 1998)--General Semiconductor, Inc. (NYSE:SEM), a
leading manufacturer of discrete semiconductors, today reported a 3.5%
increase in net sales for the quarter ended June 30, 1998, to $98.8
million, versus the $95.5 million reported in the comparable quarter of
1997. Sales for 1998 include the small signal products business that was
acquired in October 1997.
Operating income for the second quarter was $15.6 million compared with pro
forma $18.8 million (before restructuring charges) reported in 1997.
Earnings per share for the period were $0.19 compared with pro forma $0.24,
excluding the charges noted above in the second quarter of 1997.
On a sequential basis, net sales for the second quarter of 1998 were down
7.1% from $106.4 million reported in the first quarter of 1998. Operating
income was down 20.0% from the first quarter's $19.5 million. Earnings per
share decreased 26.9% from the $0.26 per share reported in the first
quarter.
"The outlook for electronic components has continued to deteriorate and
capacity utilization remains low," stated Ronald A. Ostertag, Chairman and
Chief Executive Officer. "Despite the challenging environment in the market
for discrete components, we performed relatively well due to the strength
of our operations and our market positioning. Our business is always
tightly controlled, but we have taken additional steps to ensure that our
costs are adjusted in response to the reduced order level and continued
price pressures. At the same time, we continue to manage our business to
ensure that we remain well positioned to respond to the turnaround in
business when it occurs, and to benefit from opportunities as they arise."
Net sales for the six-month period ended June 30 increased 13.4% to $205.2
million from $180.9 million reported in the comparable period of 1997.
Operating income in the period increased 11.0% to $35.2 million versus pro
forma $31.7 million (before restructuring charges). Earnings per share for
the first half of 1998 was $0.44 versus the pro forma $0.37, before
restructuring charges, reported in 1997, an increase of 18.9%.
When first quarter 1998 earnings were released, the Company was cautiously
optimistic that strength in Europe and North America would continue to
offset weakness in Asia. In a subsequent release on June 29, the Company
disclosed that it was experiencing a more general slowdown and that
earnings for the second quarter would be below those of the first quarter.
In addition, pricing, which was previously expected to decline 6% to 8%
from 1997, is softening further and is now expected to be down nearly 10%
from last year. Orders are also expected to be soft for the remainder of
the year. Accordingly, earnings for the second half of 1998 could be below
the $0.44 per share reported in the first half by more than 40%.
General Semiconductor, Inc. is a market leader in the discrete segment of
the semiconductor industry with manufacturing facilities in China, France,
Germany, Ireland, Taiwan and the United States. The Company provides
customers with a broad array of power rectifiers, transient voltage
suppressors and small signal transistors and diodes. It has a diversified
customer base, in terms of geography and end-use markets. Customers include
leading manufacturers, located around the globe, of consumer electronics,
lighting, telecommunications equipment, computers, automotive and
automotive aftermarket products.
The information set forth above includes "forward-looking" information and,
accordingly, the cautionary statements contained in Exhibit 99 to the
Company's Form 10-K for the year ended December 31, 1997 are incorporated
herein by reference. General Semiconductor's actual results could differ
materially from the "forward-looking" information in this press release.
Visit General Semiconductor on the web at www.gensemi.com
GENERAL SEMICONDUCTOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - In Thousands, Except Per Share Information)
<TABLE>
<CAPTION>
Historical Pro Forma (A)
Six Months Ended Six Months Ended
June 30, June 30,
-------- --------
1998 1997 1997
----------- ----------- -----------
<S> <C> <C> <C>
NET SALES $ 205,159 $ 180,880 $ 180,880
----------- ----------- -----------
OPERATING COSTS AND EXPENSES:
Cost of sales 141,223 154,539 154,539
Selling, general and administrative 23,250 22,577 22,577
Research and development 2,963 3,250 3,250
Amortization of excess of cost over fair value
of net assets acquired 2,572 2,571 2,571
----------- ----------- -----------
Total operating costs and expenses 170,008 182,937 182,937
----------- ----------- -----------
OPERATING INCOME (LOSS) 35,151 (2,057) (2,057)(FNB)
Other income (expense)-net (81) 11 11
Interest expense-net (9,974) (5,340) (9,800)
----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 25,096 (7,388) (11,846)
Provision for income taxes (8,785) (1,323) 327
----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 16,311 (8,709) $ (11,519)(FNB)
===========
DISCONTINUED OPERATIONS - NET 18,210
----------- -----------
NET INCOME $ 16,311 $ 9,501
=========== ===========
Weighted Average Shares Outstanding:
Basic 36,802 34,248(FNC) 36,648 (FNA)(FNC)
Diluted 36,934 34,248(FNC)
Basic earnings (loss) per share:
Continuing operations $ 0.44 $ (0.25) $ (0.31)(FNB)
===========
Discontinued operations 0.53
----------- -----------
Net Income $ 0.44 $ 0.28
=========== ===========
Diluted earnings (loss) per share:
Continuing operations $ 0.44 $ (0.25)
Discontinued operations 0.53
----------- -----------
Net Income $ 0.44 $ 0.28
=========== ===========
(FNA) Pro Forma information assumes the conversion of the convertible notes
and a net debt level of $275.0 million for the six month period ending June
30, 1997.
(FNB) - Excluding $33.8 million ($25.3 million net of tax) of charges
related primarily to the separation of the Company's Taiwan operations. pro
forma operating income and pro forma income from continuing operations
would have been $31.7 million and $13.8 million ($0.37 per share),
respectively. These costs include $32.7 million charged to cost of sales
and $1.1 million charged to selling, general and administrative expense.
(FNC) - Share information has been retroactively restarted to reflect the 1
for 4 reverse stock split effected at the time of the spin off on July 28,
1997 and in conformance with SFAS128.
</TABLE>
GENERAL SEMICONDUCTOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - In Thousands, Except Per Share Information)
<TABLE>
<CAPTION>
Historical Pro Forma (FNA)
Three Months Ended Three Months Ended
June 30, June 30,
1998 1997 1997
----------- ----------- -----------
<S> <C> <C> <C>
NET SALES $ 98,762 $ 95,511 $ 95,511
OPERATING COSTS AND EXPENSES:
Cost of sales 70,115 88,596 88,596
Selling, general and administrative 10,286 11,410 11,410
Research and development 1,463 1,818 1,818
Amortization of excess of cost over
fair value of net assets acquired 1,286 1,286 1,286
----------- ----------- -----------
Total operating costs and expenses 83,150 103,110 103,110
----------- ----------- -----------
OPERATING INCOME (LOSS) 15,612 (7,699) (7,599)(FNB)
Other income (expense)-net (12) (40) (40)
Interest expense-net (5,067) (2,277) (4,900)
----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 10,533 (9,916) (12,539)
Provision for income taxes (3,687) 500 1,471
INCOME (LOSS) FROM CONTINUING
OPERATIONS 8,848 (9,416) $ 11,068 (FNB)
===========
DISCONTINUED OPERATIONS - NET 1,234
-----------
NET INCOME (LOSS) $ 8,848 $ (8,182)
----------- -----------
Weighted Average Shares Outstanding:
Basic 36,813 34,267 (FNC) 36,666 (FNA)(FNC)
Diluted 36,965 34,267 (FNC)
Basic earnings (loss) per share:
Continuing operations $ 0.19 $ (0.27) $ (0.30)(FNB)
===========
Discontinued operations 0.03
----------- -----------
Net Income (loss) $ 0.19 $ (0.24)
=========== ===========
Diluted earnings (loss) per share:
Continuing operations $ 0.19 $ (0.27)
Discontinued operations 0.03
----------- -----------
Net Income (loss) $ 0.19 $ (0.24)
=========== ===========
(FNA) - Pro forma information assumes the conversion of the convertible
notes and a net debt level of $275.0 million for the three month period
ending June 30, 1997.
(FNB) - Excluding $26.4 million ($19.8 million net of tax) of charges
related primarily to the separation of the Company's Taiwan operations, pro
forma operating income and pro forma income from continuing operations
would have been $18.8 million and $8.7 million ($0.24 par share),
respectively. These costs include $25.4 million charged to cost of sales
and $1.0 million charged to selling, general and administrative expense.
(FNC) - Share information has been retroactively restated to reflect the 1
for 4 reverse stock split affected at the time of the spin-off on July 28,
1997 and in conformance with SFAS128.
</TABLE>
GENERAL SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(unaudited)
June 30, December 31,
1998 1997
----------- -----------
Cash $ 6,378 $ 5,192
Accounts receivable, less allowance for
doubtful accounts 63,498 54,077
Inventories 37,872 34,309
Other current assets 23,023 24,153
----------- -----------
Total current assets 120,771 117,731
Total non-current assets 432,356 432,574
----------- -----------
TOTAL ASSETS 553,127 550,305
=========== ===========
Total current Liabilities $ 61,830 $ 100,994
----------- -----------
Long-term debt 292,000 263,764
Other liabilities 96,174 99,186
----------- -----------
Total non-current liabilities 308,174 362,950
----------- -----------
Total liabilities 450,004 463,944
Total stockholders' equity 103,123 86,361
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 553,127 $ 550,305
=========== ===========
