SEC Filing | Vishay Intertechnology, Inc.

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 September 30, 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 November 2, 1995 registrant had 51,239,826 shares of its Common Stock and 7,232,035 shares of its Class B Common Stock outstanding.

VISHAY INTERTECHNOLOGY, INC. FORM 10-Q SEPTEMBER 30, 1995 CONTENTS Page No. PART I. FINANCIAL INFORMATION Item 1. Consolidated Condensed Balance Sheets - 3-4 September 30, 1995 and December 31, 1994 Consolidated Condensed Statements of 5 Operations - Three Months Ended September 30, 1995 and 1994 Consolidated Condensed Statements of 6 Operations - Nine Months Ended September 30, 1995 and 1994 Consolidated Condensed Statements of 7 Cash Flows - Nine Months Ended September 30, 1995 and 1994 Notes to Consolidated Condensed 8-9 Financial Statements Item 2. Management's Discussion and Analysis 10-12 of Financial Condition and Results of Operations PART II. OTHER INFORMATION 13

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited - In thousands) September 30 December 31 ASSETS 1995 1994 ------------ ----------- CURRENT ASSETS Cash and cash equivalents $33,275 $26,857 Accounts receivable 194,771 165,188 Inventories: Finished goods 131,396 101,008 Work in process 90,475 94,005 Raw materials 119,569 108,594 Prepaid expenses and other current assets 65,082 64,909 ------------ ----------- TOTAL CURRENT ASSETS 634,568 560,561 PROPERTY AND EQUIPMENT - AT COST Land 46,803 40,113 Buildings and improvements 188,992 171,689 Machinery and equipment 534,886 473,471 Construction in progress 85,859 48,689 Allowance for depreciation (242,006) (201,671) ------------ ----------- 614,534 532,291 GOODWILL 227,794 226,534 OTHER ASSETS 18,287 14,573 ------------ ----------- $1,495,183 $1,333,959 ============ ===========

September 30 December 31 LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994 ------------ ----------- CURRENT LIABILITIES Notes payable to banks $18,203 $28,285 Trade accounts payable 60,580 63,318 Payroll and related expenses 47,435 39,155 Other accrued expenses 58,752 64,505 Income taxes 11,964 1,849 Current portion of long-term debt 36,899 35,127 ------------ ----------- TOTAL CURRENT LIABILITIES 233,833 232,239 LONG-TERM DEBT 226,159 402,337 DEFERRED INCOME TAXES 43,520 39,889 OTHER LIABILITIES 18,941 19,177 ACCRUED RETIREMENT COSTS 81,258 75,229 STOCKHOLDERS' EQUITY Common stock 5,124 2,257 Class B common stock 723 377 Capital in excess of par value 738,448 509,966 Retained earnings 122,793 53,734 Foreign currency translation adjustment 30,596 4,584 Unearned compensation (402) (20) Pension adjustment (5,810) (5,810) ------------ ----------- 891,472 565,088 ------------ ----------- $1,495,183 $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 September 30, 1995 1994 ------------ ----------- Net sales $300,629 $260,963 Costs of products sold 221,364 196,036 ------------ ----------- GROSS PROFIT 79,265 64,927 Selling, general, and administrative expenses 39,586 37,185 Amortization of goodwill 1,622 1,489 ------------ ----------- OPERATING INCOME 38,057 26,253 Other income (expense): Interest expense (7,959) (7,556) Other (322) 43 ------------ ----------- (8,281) (7,513) ------------ ----------- EARNINGS BEFORE INCOME TAXES 29,776 18,740 Income taxes 7,444 4,179 ------------ ----------- NET EARNINGS $22,332 $14,561 ============ =========== Net earnings per share $0.42 $0.29 ============ =========== Weighted average shares outstanding 53,392 49,997 See notes to consolidated condensed financial statements. VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited - In thousands except earnings per share) Nine Months Ended September 30, 1995 1994 ------------ ----------- Net sales $926,374 $713,661 Costs of products sold 684,318 542,482 ------------ ----------- GROSS PROFIT 242,056 171,179 Selling, general, and administrative expenses 121,229 98,812 Amortization of goodwill 4,815 3,139 ------------ ----------- OPERATING INCOME 116,012 69,228 Other income (expense): Interest expense (24,851) (17,992) Other (640) 76 ------------ ----------- (25,491) (17,916) ------------ ----------- EARNINGS BEFORE INCOME TAXES 90,521 51,312 Income taxes 21,431 9,867 ------------ ----------- NET EARNINGS $69,090 $41,445 ============ =========== Net earnings per share $1.31 $0.87 ============ =========== Weighted average shares outstanding 52,940 47,886 See notes to consolidated condensed financial statements.

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands) Nine Months Ended September 30, 1995 1994 ------------ ----------- OPERATING ACTIVITIES Net earnings $69,090 $41,445 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 51,498 40,995 Other 1,226 1,029 Changes in operating assets and liabilities (46,500) (53,125) ------------ ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 75,314 30,344 INVESTING ACTIVITIES Purchases of property and equipment-net (104,151) (64,102) Purchase of businesses, net of cash acquired - (179,673) ------------ ----------- NET CASH USED IN INVESTING ACTIVITIES (104,151) (243,775) FINANCING ACTIVITIES Proceeds from long-term borrowings 207,689 343,249 Payments on long-term borrowings (393,484) (230,615) Net (payments)proceeds on short-term borrowings (11,164) 10,809 Proceeds from sale of common stock 230,863 109,817 ------------ ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 33,904 233,260 Effect of exchange rate changes on cash 1,351 490 ------------ ----------- INCREASE IN CASH AND CASH EQUIVALENTS 6,418 20,319 Cash and cash equivalents at beginning of period 26,857 10,931 ------------ ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $33,275 $31,250 ============ =========== See notes to consolidated condensed financial statements. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) September 30, 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 reflect a 5% stock dividend paid March 31, 1995 and a 2-for-1 stock split paid on June 16, 1995. Earnings per share for the three and nine month periods ended September 30, 1995 reflect the weighted effect of the issuance of 2.79 million shares of common stock in August 1994 and of 5.75 million shares of common stock in September 1995. Note 3: Public Stock Offering In September 1995, the Company completed an offering of 5,750,000 shares of its common stock and received net proceeds of $230,863,000. The proceeds were used to prepay bank indebtedness. Note 4: 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 nine months ended September 30, 1994 , assuming consummation of the Vitramon acquisition and related financing as of January 1, 1994, is as follows (in thousands, except per share data): Pro Forma Nine Months Ended September 30, 1994 Net sales $ 782,344 Net earnings $ 47,528 Net earnings per share $ 0.90

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Net sales for the quarter and nine months ended September 30, 1995 increased $39,966,000 or 15.2% and $212,713,000 or 29.8%, respectively, from the comparable periods of the prior year. The increase for the quarter ended September 30, 1995 reflects the strong performance of Vitramon and Vishay's other surface mount components businesses. The increase in net sales for the nine months ended September 30, 1995 includes $87,753,000 of net sales of Vitramon for the first six months of 1995. Vitramon was acquired effective July 1, 1994. In addition, the weakening of the U.S. dollar against foreign currencies in the quarter and nine months ended September 30, 1995 in comparison to the prior year's period resulted in increases in reported sales of $10,481,000 and $46,276,000, respectively. Net sales, exclusive of foreign currency fluctuations, increased 11.2% over the prior year quarter. Net sales, exclusive of foreign currency fluctuations and Vitramon sales for the first six months, increased 11.0% for the nine months ended September 30, 1995. Net bookings for the third quarter increased by 5.6% over the prior year quarter. Net bookings for the nine months ended September 30, 1995, exclusive of Vitramon's bookings for the first six months, increased by 17.0% over the comparable prior year period. Income statement captions as a percentage of sales and the effective tax rates were as follows: Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 Costs of products sold 73.6 75.1 73.9 76.0 Gross profit 26.4 24.9 26.1 24.0 Selling, general and administrative expenses 13.2 14.3 13.1 13.8 Operating income 12.7 10.1 12.5 9.7 Earnings before income taxes 9.9 7.2 9.8 7.2 Effective tax rate 25.0 22.3 23.7 19.2 Net earnings 7.4 5.6 7.5 5.8

Costs of products sold for the quarter and nine months ended September 30, 1995 were 73.6% and 73.9%, of net sales, respectively, as compared to 75.1% and 76.0%, respectively, for the comparable prior year's period. The factors contributing to this decrease included: i) the effect of the peso devaluation, which contributed approximately $1,000,000 and $2,800,000 to the gross profit for the quarter and nine months ended September 30, 1995, ii) the fact that gross profits for Vitramon are higher than Vishay's other operating companies, iii) Israeli government grants of $3,693,000 and $9,633,000, for the quarter and nine months ended September 30, 1995, respectively, as compared to $3,033,000 and $7,190,000, respectively, for the comparable prior year's 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 and capital investment in Israel. Selling, general, and administrative expenses for the quarter and nine months ended September 30, 1995 were 13.2% and 13.1% of net sales, respectively, as compared to 14.3% and 13.8% for the comparable prior year periods. These decreased percentages result primarily from the increased sales volume. While management believes these percentages to be acceptable, management continues to explore additional cost saving opportunities. Interest costs increased by $403,000 and $6,859,000, respectively, for the quarter and nine months ended September 30, 1995 over the comparable prior year periods as a result of increases in the floating rates of Vishay's bank indebtedness and an overall increase in debt outstanding as a result of the acquisition of Vitramon in July 1994 and purchases of property and equipment. The net proceeds of $230,863,000 from a common stock offering completed in September 1995, were used to prepay bank indebtedness. The effective tax rates for the quarter and nine months ended September 30, 1995 were 25.0% and 23.7%, respectively, compared to 22.3% and 19.2% for the comparable prior year's period. The effective tax rate for calendar year 1994 was 20.5%. The higher tax rates for the quarter and nine months ended September 30, 1995 reflect increased earnings in higher tax rate 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 $4,595,000 and $3,883,000 for the quarters ended September 30, 1995 and 1994, respectively, and $12,790,000 and $9,825,000 for the nine month periods ended September 30, 1995 and 1994, respectively. The period to period increases are primarily a result of increased earnings for the

Israeli operations as a result of increased production. 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 $75,314,000 for the nine months ended September 30, 1995 compared to $30,344,000 for the prior year's period. Included in net cash provided by operating activities are cash payments of $10,056,000 and $9,745,000 made in the first nine months of 1995 and 1994, respectively, for accruals the Company established in connection with acquisitions. Net purchases of property and equipment for the nine months ended September 30, 1995 were $104,151,000 compared to $64,102,000 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 $33,904,000 for the nine months ended September 30, 1995 includes $230,863,000 of net proceeds from a common stock offering which were used to prepay bank indebtedness, which had increased as a result of borrowings used primarily to finance additions to property and equipment. The Company has established accruals relating to the Vitramon acquisition of $12,876,000. These accruals, which are included in other accrued expenses, will not affect future earnings but will require cash expenditures. The Company's financial condition at September 30, 1995 is strong, with a current ratio of 2.7 to 1. The Company's ratio of long-term debt (less current portion) to stockholders' equity was .25 to 1 at September 30, 1995 and .70 to 1 at 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.

VISHAY INTERTECHNOLOGY, INC. PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) None (b) Reports on Form 8-K None

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: November 6, 1995

5 1,000 9-MOS DEC-31-1995 SEP-30-1995 33275 0 201874 7103 341440 634568 856540 242006 1495183 233833 0 5124 0 0 886348 1495183 926374 926374 684318 684318 126684 0 24851 90521 21431 69090 0 0 0 69090 1.31 1.31