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 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.

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

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 ========== ==========

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.

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

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.

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.

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.

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

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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