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 June 30, 2000 [ ] 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 (IRS employer incorporation or organization) identification no.) 63 Lincoln Highway Malvern, Pennsylvania 19355-2120 (Address of principal executive offices) (610) 644-1300 (Registrant's telephone number, including area code) 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 14, 2000 registrant had 122,538,541 shares of its Common Stock and 15,525,246 shares of its Class B Common Stock outstanding.

VISHAY INTERTECHNOLOGY, INC. FORM 10-Q JUNE 30, 2000 CONTENTS Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Consolidated Condensed Balance Sheets - June 30, 2000 and December 31, 1999 3-4 Consolidated Condensed Statements of Operations - Three Months Ended June 30, 2000 and 1999 5 Consolidated Condensed Statements of Operations - Six Months Ended June 30, 2000 and 1999 6 Consolidated Condensed Statements of Cash Flows - Six Months Ended June 30, 2000 and 1999 7 Notes to Consolidated Condensed Financial Statements 8-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-15 PART II. OTHER INFORMATION 16-17

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited - In thousands) June 30 December 31 2000 1999 ----------- ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 172,028 $ 105,193 Accounts receivable 412,901 320,978 Inventories: Finished goods 150,631 144,645 Work in process 125,860 131,951 Raw materials 139,219 121,704 Deferred income taxes 39,148 35,119 Prepaid expenses and other current assets 78,058 67,159 ----------- ----------- TOTAL CURRENT ASSETS 1,117,845 926,749 PROPERTY AND EQUIPMENT - AT COST Land 48,327 51,453 Buildings and improvements 251,817 261,528 Machinery and equipment 1,038,589 1,073,556 Construction in progress 84,523 61,881 Allowance for depreciation (531,640) (517,873) ----------- ----------- 891,616 930,545 GOODWILL 286,926 399,970 INVESTMENT IN LPSC 140,393 -- OTHER ASSETS 53,065 66,517 ----------- ----------- $ 2,489,845 $ 2,323,781 =========== =========== 3

June 30 December 31 2000 1999 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable to banks $ 7,037 $ 26,790 Trade accounts payable 103,905 101,613 Payroll and related expenses 87,544 77,209 Other accrued expenses 110,146 107,724 Income taxes 77,996 27,418 Current portion of long-term debt 76 4,445 ----------- ----------- TOTAL CURRENT LIABILITIES 386,704 345,199 LONG-TERM DEBT 175,447 656,943 DEFERRED INCOME TAXES 64,082 62,712 DEFERRED INCOME 46,595 50,462 MINORITY INTEREST 53,064 61,637 OTHER LIABILITIES 23,252 24,715 ACCRUED PENSION COSTS 103,174 108,521 STOCKHOLDERS' EQUITY Common Stock 12,254 11,146 Class B Common Stock 1,553 1,557 Capital in excess of par value 1,420,516 985,393 Retained earnings 303,715 97,591 Accumulated other comprehensive loss (98,965) (81,009) Unearned compensation (1,546) (1,086) ----------- ----------- 1,637,527 1,013,592 ----------- ----------- $ 2,489,845 $ 2,323,781 =========== =========== See notes to consolidated condensed financial statements. 4

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited - In thousands except earnings per share) Three Months Ended June 30, 2000 1999 ---------- ---------- Net sales $ 612,771 $ 425,323 Costs of products sold 358,675 316,642 --------- --------- GROSS PROFIT 254,096 108,681 Selling, general, and administrative expenses 74,400 61,775 Amortization of goodwill 2,911 3,221 --------- --------- OPERATING INCOME 176,785 43,685 Other income (expense): Interest expense (7,905) (13,115) Gain on termination of interest rate swap agreements 6,375 -- Other 2,714 (273) --------- --------- 1,184 (13,388) --------- --------- EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST 177,969 30,297 Income taxes 39,385 7,464 Minority interest 6,731 2,652 --------- --------- NET EARNINGS $ 131,853 $ 20,181 ========= ========= Basic earnings per share $ 0.97 $ 0.16 Diluted earnings per share $ 0.96 $ 0.16 Weighted average shares outstanding - basic 135,574 126,723 Weighted average shares outstanding - diluted 137,919 127,923 See notes to consolidated condensed financial statements. 5

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited - In thousands except earnings per share) Six Months Ended June 30, 2000 1999 ----------- ----------- Net sales $ 1,151,665 $ 848,381 Costs of products sold 709,853 639,810 ----------- ----------- GROSS PROFIT 441,812 208,571 Selling, general, and administrative expenses 142,344 124,272 Amortization of goodwill 6,047 6,513 ----------- ----------- OPERATING INCOME 293,421 77,786 Other income (expense): Interest expense (20,420) (25,995) Loss on disposal of subsidiary -- (10,073) Gain on termination of interest rate swap agreements 6,375 -- Other 2,540 959 ----------- ----------- (11,505) (35,109) ----------- ----------- EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST 281,916 42,677 Income taxes 62,839 16,507 Minority interest 12,953 5,171 ----------- ----------- NET EARNINGS $ 206,124 $ 20,999 =========== =========== Basic earnings per share $ 1.55 $ 0.17 Diluted earnings per share $ 1.52 $ 0.16 Weighted average shares outstanding - basic 132,796 126,722 Weighted average shares outstanding - diluted 135,328 127,752 See notes to consolidated condensed financial statements. 6

VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (Unaudited - In thousands) Six Months Ended June 30 June 30 2000 1999 ---------- ---------- OPERATING ACTIVITIES Net earnings $ 206,124 $ 20,999 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 71,396 73,009 Loss on sale of subsidiary -- 10,073 Loss on disposal of property and equipment 1,565 -- Minority interest in net earnings of consolidated subsidiaries 12,953 5,171 Other (2,756) 13,647 Changes in operating assets and liabilities (90,182) (59,423) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 199,100 63,476 INVESTING ACTIVITIES Purchases of property and equipment (89,616) (60,504) Proceeds from sale of subsidiary -- 9,118 Proceeds from sale of property and equipment 3,868 1,149 Deconsolidation of LPSC (7,574) -- --------- --------- NET CASH USED IN INVESTING ACTIVITIES (93,322) (50,237) FINANCING ACTIVITIES Proceeds from long-term borrowings -- 3,316 Principal payments on long-term debt (97) (5,947) Net payments on revolving credit lines (471,155) (40,189) Net changes in short-term borrowings (1,147) 13,488 Proceeds from sale of common stock 395,747 -- Proceeds from stock options exercised 39,617 -- --------- --------- NET CASH USED IN FINANCING ACTIVITIES (37,035) (29,332) Effect of exchange rate changes on cash (1,908) (3,781) --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 74,409 (19,874) Cash and cash equivalents at beginning of period 97,619 113,729 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 172,028 $ 93,855 ========= ========= See notes to consolidated condensed financial statements. 7

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) June 30, 2000 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 accruals) 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 period 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, 1999. Note 2: Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except earnings per share): Three Months Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 ---------------- ------------- ------------- ------------- Numerator: Net income $ 131,853 $ 20,181 $ 206,124 $ 20,999 ---------------- ------------- ------------- ------------- Denominator: Denominator for basic earnings per share - weighted average shares 135,574 126,723 132,796 126,722 Effect of dilutive securities: Stock appreciation rights - 530 290 530 Employee stock options 2,141 588 2,042 418 Other 204 82 200 82 ---------------- ------------- ------------- ------------- Dilutive potential common shares 2,345 1,200 2,532 1,030 Denominator for diluted earnings per share - adjusted weighted average shares 137,919 127,923 135,328 127,752 Basic earnings per share $ 0.97 $ 0.16 $ 1.55 $ 0.17 ================ ============= ============= ============= Diluted earnings per share $ 0.96 $ 0.16 $ 1.52 $ 0.16 ================ ============= ============= ============= All share and per share amounts for all periods presented reflect a three-for-two stock split paid on June 9, 2000. 8

In connection with the Company's acquisition of 65% of Lite-On Power Semiconductor Corporation ("LPSC") in July 1997, the Company issued stock appreciation rights ("SARs") to the former owners of LPSC. The SARs represented the right to receive, in stock, the increase in value on the equivalent of 3,200,000 shares of the Company's Common Stock, above $11.68 per share. On January 24, 2000, the Company exercised its right to call the SARs. Based on the call price of $26.43 per share and the average closing price of Vishay shares for the thirty days prior to January 24, 2000, the Company would have had to issue 2,294,000 shares of Vishay Common Stock to settle the SARs. For the quarter and six months ended June 30, 2000, 1,537,000 and 1,625,000 shares were included in the calculation of basic earnings per share, respectively, and 1,537,000 and 1,915,000 shares were included in the calculation of diluted earnings per share, respectively. See Note 6 with respect to the sale of the Company's interest in LPSC for consideration including transfer to the Company of the rights under the SARs. Note 3: Business Segment Information The Company designs, manufactures, and markets electronic components that cover a wide range of products and technologies. The Company has two reportable segments: Passive Electronic Components (Passives) and Active Electronic Components (Actives). The Company evaluates performance and allocates resources based on several factors, of which the primary financial measure is the computation of business segment operating income excluding amortization of intangibles. The corporate component of operating income represents corporate selling, general, and administrative expenses. Three Months Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 -------------- --------------- ---------------- ------------- Business Segment Information (in thousands) Net Sales: Passives $ 394,297 $ 246,440 $ 719,807 $ 497,972 Actives 218,474 178,883 431,858 350,409 -------------- --------------- ---------------- ------------- $ 612,771 $ 425,323 $ 1,151,665 $ 848,381 -------------- --------------- ---------------- ------------- Operating Income: Passives $ 135,103 $ 23,202 $ 213,077 $ 39,821 Actives 55,944 25,991 104,610 49,329 Corporate (11,351) (2,287) (18,219) (4,851) Amortization of Goodwill (2,911) (3,221) (6,047) (6,513) -------------- --------------- ---------------- ------------- $ 176,785 $ 43,685 $293,421 $ 77,786 -------------- --------------- ---------------- ------------- 9

Note 4: Comprehensive Income Total comprehensive income (loss) includes the following components (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 -------------- -------------- -------------- ------------ Net Income $ 131,853 $ 20,181 $ 206,124 $ 20,999 Other comprehensive income (loss): Foreign currency translation adjustment (4,226) (10,292) (18,233) (52,441) Pension liability adjustment, net of tax 46 1,433 277 1,967 -------------- -------------- -------------- -------------- Total other comprehensive income (loss) (4,180) (8,859) (17,956) (50,474) -------------- -------------- -------------- -------------- Comprehensive income (loss) $ 127,673 $ 11,322 $ 188,168 $ (29,475) ============== ============== ============== ============== Note 5: Income Taxes The effective tax rate for the six months ended June 30, 2000 was 22.3% as compared to 38.7% for the six months ended June 30, 1999. The unusually high effective tax rate for the six months ended June 30, 1999 was due to the following: (i) the non-tax deductibility of the pretax loss on the sale of Nicolitch, S.A. ($10,073,000); (ii) the tax expense recorded on the sale of Nicolitch, S.A. ($1,416,000); and (iii) the change in the tax rate in Germany ($1,939,000). Exclusive of these items, the effective tax rate for the six months ended June 30, 1999 would have been 24.9%. Note 6: Lite-On Power Semiconductor Corporation On May 31, 2000, the Company entered into a definitive agreement for the sale of its 65% interest in LPSC to the Lite-On Group for $41,000,000 in cash, and the transfer to the Company of the rights under the SARs issued to the Lite-On Group in July 1997 when the Company acquired its interest in LPSC. Under this agreement, the Company surrendered control of LPSC. LPSC was deconsolidated and accounted for by the Company under the equity method beginning May 31, 2000. The sale of the Company's interest in LPSC was completed on July 12, 2000 and resulted in a pretax gain of $8,991,000, which will be included in the Company's results for the third quarter of 2000. The Company used the cash proceeds to repay a portion of the debt outstanding under its long-term revolving credit facility during July 2000. Note 7: Sale of Subsidiary On March 26, 1999, the Company finalized the sale of Nicolitch, S.A., its French manufacturer of printed circuit boards, to Leonische Drahtwerke AG. In connection with the sale, the Company received proceeds of $9,118,000 and recorded a non-cash book loss of $11,489,000, including tax expense of $1,416,000. 10

Note 8: Common Stock Offering and Termination of Interest Rate Swap Agreements The Company completed a public offering of its Common Stock on May 15, 2000, selling 5,595,000 shares at a price of $73.50 per share ($49.00 adjusted for three-for-two stock split). The total net proceeds to the Company from the offering, after deducting the underwriting discount and estimated expenses, were approximately $395,747,000. These proceeds were used to repay a portion of the debt outstanding under its long-term revolving credit facility. In connection with this repayment of debt, the Company terminated $125,000,000 notional amount of interest rate swap agreements and recognized a pretax gain of $6,375,000, which is reflected in other income (expense). Note 9: Accounting Pronouncement Pending Adoption In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133." This statement defers the effective date of the implementation of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," dealing with the accounting and reporting standards for derivative instruments and hedging activities, to all fiscal quarters of fiscal years beginning after June 15, 2000. The Company continues its process of assessing the impact of SFAS No. 133 on its financial statements. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. Any changes to the Company's revenue recognition policy resulting from the implementation of SAB 101 would not involve any restatement of prior periods, but would be reported as a change in accounting principles in the quarter ending December 31, 2000. To the extent that SAB 101 is relevant to the recognition of revenue on the Company's future shipments, the Company would adopt the new accounting principle effective January 1, 2001. Accordingly, any shipments previously reported as revenue that do not meet SAB 101 revenue recognition guidance would be recorded as revenue in future periods. The Company is still in the process of assessing the impact of SAB 101 on its financial statements. Management believes that SAB 101 will not affect the underlying strength of its business operations as measured by the dollar value of its products shipped and cash flows from operations. 11

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, 2000 1999 2000 1999 Costs of products sold 58.5 % 74.4 % 61.6 % 75.4 % Gross profit 41.5 25.6 38.4 24.6 Selling, general and administrative expenses 12.1 14.5 12.4 14.6 Operating income 28.9 10.3 25.5 9.2 Earnings before income taxes and minority interest 29.0 7.1 24.5 5.0 Net earnings 21.5 4.7 17.9 2.5 Effective tax rate 22.1 24.6 22.3 38.7 Net Sales Net sales for the quarter and six months ended June 30, 2000 increased $187,448,000, or 44.1%, and $303,284,000, or 35.7%, from the comparable periods in 1999. Both the passive and active components businesses contributed to these increases. The passive components business net sales were $394,297,000 for the second quarter of 2000 as compared to $246,440,000 for the second quarter of 1999, a 60.0% increase. For the six months ended June 30, 2000, passive net sales were $719,807,000 as compared to $497,972,000 for the comparable period in 1999, a 44.5% increase. The active components business net sales for the second quarter of 2000 were $218,474,000 as compared to $178,883,000 for the second quarter of 1999, a 22.1% increase. For the six months ended June 30, 2000, net sales were $431,858,000 as compared to $350,409,000 for the comparable period in 1999, a 23.2% increase. The sales increases reflected continued strong demand for the Company's products and increases in average selling prices. The strengthening of the U.S. dollar against foreign currencies had the effect of decreasing reported net sales by $22,606,000 and $45,479,000 for the quarter and the six months ended June 30, 2000, respectively. Costs of Products Sold Costs of products sold for the quarter and the six months ended June 30, 2000 were 58.5% and 61.6% of net sales, respectively, as compared to 74.4% and 75.4% for the comparable prior year periods. Gross profit as a percentage of net sales for the quarter and six months ended June 30, 2000 12

was 41.5% and 38.4% as compared to 25.6% and 24.6% for the comparable prior year periods. Both the passive and active components businesses contributed to the improved gross margins. The passive components business gross margins for the quarter and six months ended June 30, 2000 were 42.5% and 38.4%, respectively, as compared to 21.9% and 20.8% for the comparable prior year periods. Price and volume increases in the resistor, tantalum capacitor, and multi-layer ceramic chip capacitor product lines were primarily responsible for this improvement in gross margins. The active components business gross margins for the quarter and six months ended June 30, 2000 were 39.6% and 38.3%, respectively, as compared to 30.6% and 30.4% for the comparable prior year periods. Strong demand, continued cost reductions, increased manufacturing efficiencies and price increases in some product lines all contributed to the improved gross margins. Israeli government grants, recorded as a reduction of costs of products sold, for the second quarter and six months ended June 30, 2000 were $3,740,000 and $7,417,000, respectively, as compared to $3,544,000 and $7,008,000 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 Company employees in Israel. Deferred income at June 30, 2000 relating to Israeli government grants was $46,595,000, as compared to $50,462,000 at December 31, 1999. Selling, General, and Administrative Expenses Selling, general, and administrative expenses for the second quarter and six months ended June 30, 2000 were 12.1% and 12.4% of net sales, respectively, as compared to 14.5% and 14.6% of net sales for the comparable prior year periods. The decrease in selling, general and administrative expenses, as a percentage of net sales, was the result of higher net sales in 2000 as compared to 1999 and company-wide cost reduction initiatives, particularly the reduction of headcount in high labor cost countries. Interest Expense Interest costs for the quarter and six months ended June 30, 2000 decreased by $5,210,000 and $5,575,000, respectively, from the comparable prior year periods. This decrease was a result of lower outstanding bank borrowings during both periods of 2000 as compared to the prior year periods. The Company received net proceeds of approximately $395,747,000 from a Common Stock offering consummated in May 2000, which were used to pay down long-term debt (see Note 8). Other Income Other income for the second quarter of 2000 increased by $2,987,000 as compared to the second quarter of 1999. This was attributable to increases in foreign exchange gains, interest income and income recognized under the equity method, partially offset by losses on the sale of fixed assets. Other income for the six months ended June 30, 2000 increased by $1,580,000 as compared to the comparable prior year period. Increases in interest income and income recognized under the equity method, partially offset by losses on the sale of fixed assets contributed to this increase. 13

Gain on Termination of Interest Rate Swap Agreements Proceeds received from the May 2000 Common Stock offering (see Note 8) were used to pay down a portion of the debt outstanding under the Company's long-term revolving credit agreement. In connection with this repayment of debt, the Company terminated $125,000,000 notional amount of interest rate swap agreements and recognized a pretax gain of $6,375,000. Minority Interest Minority interest for the second quarter and six months ended June 30, 2000 increased by $4,079,000 and $7,782,000 respectively, as compared to the comparable prior year periods. This increase was due to the increase in net earnings of Siliconix, of which Vishay owns 80.4%. Income Taxes The effective tax rate for the six months ended June 30, 2000 was 22.3% as compared to 38.7% for the comparable prior year period. The higher tax rate for the six months ended June 30, 1999 primarily reflected the non-tax deductibility of the loss on the sale of Nicolitch, S.A. Tax expense on the sale of Nicolitch, S.A. was $1,416,000. Also, a tax rate change in Germany resulted in a decrease in German deferred tax assets which increased 1999 tax expense by $1,939,000. Exclusive of the effect of the sale of Nicolitch, S.A. and the tax rate change in Germany, the effective tax rate on earnings before minority interest for the six months ended June 30, 1999 would have been 24.9%. The continuing effect of low tax rates in Israel applicable to the Company, as compared to the statutory rate in the United States, resulted in increases in net earnings of $23,077,000 and $4,228,000 for the quarters ended June 30, 2000 and 1999, respectively, and $37,009,000 and $7,225,000 for the six months ended June 30, 2000 and 1999, respectively. The favorable Israeli tax rates are applied to specific government approved projects and are normally available for a period of ten or fifteen years. Financial Condition and Liquidity Cash flows from operations for the six months ended June 30, 2000 were $199,100,000 compared to $63,476,000 for the six months ended June 30, 1999. The increase in cash generated from operations was primarily attributable to increased earnings. Net purchases of property and equipment were $89,616,000 for the six months ended June 30, 2000 compared to $60,504,000 in the comparable prior year period, reflecting the Company's efforts toward increasing capacity. The Company paid down $471,155,000 on its revolving credit lines during the first half of 2000. These payments were partially funded by $395,747,000 of proceeds from the sale of Common Stock in the May 2000 Common Stock offering and $39,617,000 of proceeds from the exercise of stock options. On July 12, 2000, the Company completed the sale of its 65% interest in LPSC to the Lite-On Group for $41,000,000 in cash and the transfer to the Company of the rights under the SARs. The cash proceeds were used to further pay down the Company's long-term debt. The Company's financial condition at June 30, 2000 was strong, with a current ratio of 2.89 to 1. The Company's ratio of long-term debt, less current portion, to stockholders' equity was .11 to 1 at June 30, 2000 as compared to .77 to 1 at June 30, 1999 and .65 to 1 at December 31, 1999. 14

On August 9, 2000, the Board of Directors of the Company authorized the officers of the Company to take the appropriate actions to enable the repurchase of up to 5,000,000 shares of the Company's Common Stock from time to time in the open market, subject to bank approval. 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 Company's 1999 Annual Report on Form 10-K contains cautionary statements that 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. Market Risk Disclosure The Company's cash flows and earnings are subject to fluctuations resulting from changes in foreign currency exchange rates and interest rates. The Company manages its exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. The Company does not speculate in derivative instruments for profit or execute derivative instrument contracts for which there are no underlying exposures. The Company does not use financial instruments for trading purposes and is not a party to any leveraged derivatives. The Company monitors its underlying market risk exposures on an ongoing basis and believes that it can modify or adapt its hedging strategies as needed. The Company is exposed to changes in U.S. dollar LIBOR interest rates on its floating rate revolving credit facility. At June 30, 2000, the outstanding balance under this facility was $175,000,000. On a selective basis, the Company from time to time enters into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates could have on its outstanding variable rate debt. At June 30, 2000, a fixed rate swap was in place on the entire balance of the Company's revolving credit facility. The impact of interest rate instruments on the Company's results of operations was not significant. 15

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 18, 2000. (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 17, 2000, 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 65,193,094. Broker For Against Abstain Non-votes --- ------- ------- --------- Felix Zandman 64,213,776 979,318 0 0 Avi D. Eden 64,215,286 977,808 0 0 Robert A. Freece 64,215,286 977,808 0 0 Richard N. Grubb 64,215,286 977,808 0 0 Eliyahu Hurvitz 62,173,948 3,019,146 0 0 Gerald Paul 64,215,286 977,808 0 0 Edward Shils 64,210,934 982,160 0 0 Luella B. Slaner 64,208,793 984,301 0 0 Mark I. Solomon 64,212,111 980,983 0 0 Jean-Claude Tine 64,211,359 981,735 0 0 Total Class B Common Stock voted was 10,475,546 in favor, 0 against, 0 abstained and 0 broker non-votes. (ii) Approval of an increase in the number of shares of Common Stock in respect of which grants may be made under the Company's 1998 Stock Option Program. Total Class A Common Stock voted was 34,445,440 in favor, 30,596,367 against, 151,287 abstained, and 0 broker non-votes. Total Class B Common Stock voted was 10,475,546 in favor, 0 against, 0 abstained, and 0 broker non-votes. 16

(iii) Approval of the Company's amended performance-based compensation plan for its Chief Executive Officer. Total Class A Common Stock voted was 59,440,726 in favor, 5,444,336 against, 308,031 abstained, and 1 broker non-vote. Total Class B Common Stock voted was 10,475,546 in favor, 0 against, 0 abstained and 0 broker non-votes. (iv) 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, 2000. Total Class A Common Stock voted was 64,473,391 in favor, 77,438 against, 642,265 abstained and 0 broker non-votes. Total Class B Common Stock voted was 10,475,546 in favor, 0 against, 0 abstained and 0 broker non-votes. Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to 10 votes on matters voted upon by stockholders. Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 - Financial Data Schedule (b) Not applicable 17

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 14, 2000

5 0000103730 Vishay Intertechnology, Inc. 1,000 U.S. Dollars 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 1.00 172,028 0 420,793 (7,892) 415,710 1,117,845 1,423,256 (531,640) 2,489,845 386,704 175,447 0 0 12,254 1,625,273 2,489,845 1,151,665 1,151,665 709,853 709,853 139,475 0 20,420 281,916 62,839 206,124 0 0 0 206,124 1.55 1.52