FOR IMMEDIATE RELEASE CONTACT: TIM IRIS
(631) 847-3169
GENERAL SEMICONDUCTOR REPORTS RECORD THIRD QUARTER
SALES AND EARNINGS AGAIN REACH RECORD HIGHS
MELVILLE, NY (OCTOBER 26, 2000)--GENERAL SEMICONDUCTOR, INC. (NYSE:SEM), a
leading manufacturer of discrete semiconductors, today reported record
results for the quarter ended September 30, 2000. Sales increased 23.3% to
an all time high of $130.5 million from the $105.8 million recorded in the
third quarter of 1999.
Quarterly operating income of $23.4 million represents a 58.1% increase
over the $14.8 million for the same period a year ago. Net income for the
quarter was $14.0 million and diluted earnings per share were $0.32.
Excluding a benefit realized for reducing the effective tax rate from 30.0%
to 28.5%, net income would have been $13.5 million or $0.31 per share.
On a sequential basis, sales increased 1.7% from the $128.3 million
reported for the second quarter of 2000. Third quarter sales were limited
by capacity constraints on surface mount products, which should be
alleviated by planned capacity additions in the fourth quarter. Gross
margin improved to 31.5% of sales compared with 30.8% in the second
quarter. Operating income increased 5.9% from the $22.1 million reported
last quarter while net income was up 15.7% from $12.1 million. Diluted
earnings per share gained 14.3% from $0.28.
For the nine month period ended September 30, 2000, revenue increased 22.8%
from $304.3 million to $373.8 million while operating income was up 71.5%
from $37.6 million to $64.5 million. Diluted earnings per share improved by
95.2% from $0.42 to $0.82.
All geographic markets remained strong with each showing double-digit sales
gains when compared to the year ago quarter. Particular strength was seen
in China and Japan. These two regions now represent 19% of our sales, up
from 16% a year ago, validating our product quality, strong customer
relationships and regional manufacturing strategy. All key end-markets also
reported good growth with power supply and telecom markets registering
double-digit year-on-year growth.
The Company continued to generate significant levels of cash and further
reduced its debt position in the quarter. The Company repaid an additional
$22 million on its revolving credit facility in the quarter and has repaid
a total of $46 million under the facility during the first nine months of
the year. Total long-term debt has been reduced from $276.5 million at 1999
year end to $230.5 million on September 30, 2000, including $172.5 million
in Convertible Subordinated Notes.
New products continued to help fuel growth with sales from new products
more than doubling over the comparable period of 1999. Year to date the
Company has 133 new products, up from the 72 new products introduced in the
similar period last year. The MOSFET business remains on track with 46
design wins registered to date.
"We are extremely pleased to report another quarter of record sales and
earnings," stated Ronald A. Ostertag, Chairman and Chief Executive Officer.
"Our focus on new power management product development, including MOSFET
and analog products as well as new product introductions in our core
rectifier and small signal business, will continue to fuel our growth. With
80% of our fourth quarter sales already in our backlog, continued sales
gains in the automotive, power supply and telecom end-markets, and improved
factory performance we remain very optimistic about our continued
performance as we enter 2001."
General Semiconductor, Inc. is a market leader in the design, manufacture
and distribution of discrete semiconductor components. The Company provides
customers with a broad array of power management products including
rectifiers, transient voltage suppressors, small signal transistors, diodes
and MOSFETs. Its global customer base includes original equipment
manufacturers, electronic distributors and contract equipment
manufacturers. Key markets for its products include automotive, computers,
consumer and telecommunications equipment.
JOIN US FOR OUR CONFERENCE CALL TO BE BROADCAST LIVE AT
8:30 AM, THURSDAY, OCTOBER 26, 2000 ON OUR WEBCAST AT:
http://acw.activate.net/ccbn/sem/102600/index.htm
-------------------------------------------------
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 and Form 10-Q filings with the Securities and Exchange
Commission 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
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<TABLE>
<CAPTION>
GENERAL SEMICONDUCTOR, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited - In Thousands, Except Per Share Information)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 130,521 $ 105,756 $ 373,809 $ 304,300
Cost of sales 89,377 76,921 258,624 224,418
----------- ----------- ----------- -----------
GROSS PROFIT 41,144 28,835 115,185 79,882
----------- ----------- ----------- -----------
Selling, general and
administrative 14,433 10,996 41,454 33,542
Research and development 1,982 1,789 5,417 4,908
Amortization of excess of
cost over fair value of
net assets acquired 1,284 1,285 3,855 3,856
----------- ----------- ----------- -----------
OPERATING INCOME 23,445 14,765 64,459 37,576
----------- ----------- ----------- -----------
Other income (expense) - net (18) 69 (25) 58
Interest expense - net (4,531) (6,555) (14,644) (16,876)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 18,896 8,279 49,790 20,758
Provision for income taxes (4,923) (2,071) (14,190) (5,190)
----------- ----------- ----------- -----------
NET INCOME $ 13,973 $ 6,208 $ 35,600 $ 15,568
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 37,709 36,822 37,570 36,821
Diluted 49,601 37,056 49,720 36,934
EARNINGS PER SHARE:
Basic $ 0.37 $ 0.17 $ 0.95 $ 0.42
Diluted $ 0.32 $ 0.17 $ 0.82 $ 0.42
</TABLE>
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GENERAL SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(UNAUDITED)
SEPTEMBER DECEMBER
30, 31,
2000 1999
----------- -----------
Cash $ 3,789 $ 2,586
Accounts receivable, less allowance for
doubtful accounts 74,788 63,246
Inventories 48,764 43,480
Other current assets 25,145 21,973
----------- -----------
Total current assets 152,486 131,285
Total non-current assets 437,276 442,514
----------- -----------
TOTAL ASSETS $ 589,762 $ 573,799
=========== ===========
Total current liabilities $ 88,327 $ 66,564
----------- -----------
Long-term debt 230,500 276,500
Other liabilities 94,205 99,353
----------- -----------
Total non-current liabilities 324,705 375,853
----------- -----------
Total liabilities 413,032 442,417
Total stockholders' equity 176,730 131,382
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 589,762 $ 573,799
=========== ===========
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GENERAL SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED CASH FLOW
(UNAUDITED - IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
2000 1999
----------- -----------
Income from operations $ 35,600 $ 15,568
Adjustments to reconcile to net cash provided
by operating activities:
Depreciation and amortization 22,268 20,534
Changes in assets and liabilities 89 (16,381)
----------- -----------
Net cash provided by operating activities 57,957 19,721
Capital expenditures (19,880) (19,492)
Net cash (used in) provided by financing
activities (36,874) 2,393
----------- -----------
Increase in cash 1,203 2,622
Cash, beginning of period 2,586 3,225
----------- -----------
Cash, end of period $ 3,789 $ 5,847
=========== ===========
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APPENDIX 1
GENERAL SEMICONDUCTOR, INC.
E.P.S. CALCULATION
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER SEPTEMBER
30, 30,
2000 2000
----------- -----------
Net income $ 13,973 $ 35,600
Convert add-back(a) 1,698 5,065
----------- -----------
$ 15,671 $ 40,665
=========== ===========
E.P.S. CALCULATION:
-------------------
Numerator - income plus add-back $ 15,671 $ 40,665
----------- -----------
Denominator - weighted average shares 49,601 49,720
Diluted E.P.S. $ 0.32 $ 0.82
(a) Represents expense incurred during the quarter for interest related to
the convertible notes and the amortization of deferred financing fees
associated with the convertible notes (totalling $2,703K), tax
effected at the marginal rate of 37.2%
Q3 $2,703 * (100% - 37.2%) = $1,698
YTD Sept. 30 $1,669 (Q1) + $1,698 (Q2) + $1,698 (Q3) = $5,065
