SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
------------------------------
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 (IRS employer
of incorporation or identification no.)
organization)
63 Lincoln Highway
Malvern, Pennsylvania 19355-2143
(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 May 15, 2003 registrant had 144,312,301 shares of its Common Stock and
15,383,296 shares of its Class B Common Stock outstanding.
VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q
MARCH 31, 2003
CONTENTS
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
(Unaudited) - March 31, 2003 and December 31, 2002 3
Consolidated Condensed Statements of Operations
(Unaudited) - Three Months Ended March 31, 5
2003 and 2002
Consolidated Condensed Statements of Cash Flows
(Unaudited) - Three Months Ended March 31, 6
2003 and 2002
Notes to Consolidated Condensed Financial 7
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Item 3. Quantitative and Qualitative Disclosures About 22
Market Risk
Item 4. Disclosure Controls and Procedures 22
PART II. OTHER INFORMATION 24
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited - In thousands)
March 31, December 31,
ASSETS 2003 2002
----------- -------------
CURRENT ASSETS
Cash and cash equivalents $ 323,535 $ 339,938
Accounts receivable, net 381,262 343,511
Inventories:
Finished goods 204,657 219,769
Work in process 144,657 142,846
Raw materials 196,226 191,451
Deferred income taxes 43,638 47,297
Prepaid expenses and other current assets 190,043 188,881
----------- -----------
TOTAL CURRENT ASSETS 1,484,018 1,473,693
PROPERTY AND EQUIPMENT - AT COST
Land 116,687 118,000
Buildings and improvements 330,686 339,869
Machinery and equipment 1,627,437 1,609,931
Construction in progress 64,107 61,830
Allowance for depreciation (888,110) (854,780)
----------- -----------
1,250,807 1,274,850
GOODWILL 1,372,359 1,356,293
OTHER INTANGIBLE ASSETS, NET 119,574 122,417
OTHER ASSETS 83,680 87,906
----------- -----------
$ 4,310,438 $ 4,315,159
=========== ===========
3
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 2003 2002
------------ -------------
CURRENT LIABILITIES
Notes payable to banks $ 16,726 $ 18,161
Trade accounts payable 125,171 123,999
Payroll and related expenses 100,496 103,184
Other accrued expenses 291,479 303,609
Income taxes 9,570 8,734
Current portion of long-term debt 18,489 18,550
----------- -----------
TOTAL CURRENT LIABILITIES 561,931 576,237
LONG-TERM DEBT 688,875 706,316
DEFERRED INCOME TAXES 49,241 52,935
DEFERRED INCOME 38,698 42,345
MINORITY INTEREST 77,708 75,985
OTHER LIABILITIES 277,696 279,462
ACCRUED PENSION COSTS 226,222 223,092
STOCKHOLDERS' EQUITY
Common Stock 14,430 14,429
Class B Common Stock 1,539 1,538
Capital in excess of par value 1,911,009 1,910,994
Retained earnings 530,202 523,354
Accumulated other comprehensive loss (66,785) (91,115)
Unearned compensation (328) (413)
----------- -----------
2,390,067 2,358,787
----------- -----------
$ 4,310,438 $ 4,315,159
=========== ===========
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
March 31,
2003 2002
---------- ---------
Net sales $ 532,127 $ 434,140
Costs of products sold 413,617 347,203
--------- ---------
GROSS PROFIT 118,510 86,937
Selling, general, and administrative expenses 96,662 74,659
Restructuring expense 687 3,024
--------- ---------
OPERATING INCOME 21,161 9,254
Other income (expense):
Interest expense (10,001) (6,909)
Other 643 2,549
--------- ---------
(9,358) (4,360)
--------- ---------
EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST 11,803 4,894
Income taxes 2,935 807
Minority interest 2,020 1,667
--------- ---------
NET EARNINGS $ 6,848 $ 2,420
========= =========
Basic earnings per share $ 0.04 $ 0.02
Diluted earnings per share $ 0.04 $ 0.02
Weighted average shares outstanding - basic 159,549 159,177
Weighted average shares outstanding - diluted 159,996 160,605
See Notes to Consolidated Condensed Financial Statements.
5
VISHAY INTERTECHNOLOGY, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)
Three Months Ended
March 31,
2003 2002
--------- ---------
OPERATING ACTIVITIES
Net earnings $ 6,848 $ 2,420
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 50,495 45,889
Loss on disposal of property and equipment (72) (9)
Amortization of imputed interest 2,375 2,305
Writedown of inventory 1,565 --
Minority interest in net earnings of consolidated subsidiaries 1,960 1,667
Other (7,753) (9,537)
Changes in operating assets and liabilities (27,475) 68,499
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 27,943 111,234
INVESTING ACTIVITIES
Purchase of property and equipment (24,173) (14,073)
Proceeds from sale of property and equipment 10,667 4,677
Purchase of businesses, net of cash acquired (10,760) (26,938)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (24,266) (36,334)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 227 153
Principal payments on long-term debt (209) (380)
Net payments on revolving credit lines (20,000) (50,311)
Net changes in short-term borrowings (1,226) (10,119)
Proceeds from stock options exercised 16 338
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (21,192) (60,319)
Effect of exchange rate changes on cash 1,112 (1,371)
--------- ---------
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (16,403) 13,210
Cash and cash equivalents at beginning of period 339,938 367,115
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 323,535 $ 380,325
========= =========
See Notes to Consolidated Condensed Financial Statements.
6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2003
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 accounting principles generally accepted in the United States 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 the Company's Form 10-K for the year ended December 31, 2002.
The results of operations for the three months ended March 31, 2003 are not
necessarily indicative of the results to be expected for the full year.
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
March 31,
2003 2002
-------- --------
Numerator:
Net earnings $ 6,848 $ 2,420
Denominator:
Denominator for basic earnings per
share - weighted average shares 159,549 159,177
Effect of dilutive securities:
Employee stock options 380 1,288
Other 67 140
-------- --------
Dilutive potential common shares 447 1,428
Denominator for diluted earnings per
share - adjusted weighted average shares 159,996 160,605
Basic earnings per share $ 0.04 $ 0.02
======== ========
Diluted earnings per share $ 0.04 $ 0.02
======== ========
7
Diluted earnings per share do not reflect the following, as the effect
would be antidilutive for the periods presented:
o assumed conversion of the Company's zero coupon subordinated
convertible notes;
o assumed conversion of the convertible notes of General
Semiconductor, acquired November 2, 2001;
o assumed conversion of the convertible notes of BCcomponents,
acquired December 13, 2002, for the three month period ended
March 31, 2003; and
o outstanding stock options (7,539,000) and warrants (8,824,000),
for the three month period ended March 31, 2003.
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 business
segment operating income excluding amortization of intangibles. The corporate
component of operating income represents corporate selling, general, and
administrative expenses.
Three Months Ended
March 31,
2003 2002
--------- ----------
Business Segment Information
(in thousands)
Net Sales:
Passives $ 274,874 $ 184,572
Actives 257,253 249,568
--------- ---------
$ 532,127 $ 434,140
========= =========
Operating Income (Loss):
Passives $ 819 $ (15,774)
Actives 25,612 29,269
Corporate (5,270) (4,241)
--------- ---------
$ 21,161 $ 9,254
========= =========
BCcomponents, acquired December 13, 2002, contributed $69,000,000 of net
sales and $1,400,000 of operating income to the passives segment for the quarter
ended March 31, 2003.
Note 4: Comprehensive Income
Comprehensive income includes the following components (in thousands):
8
Three Months Ended
March 31,
2003 2002
-------- -------
Net earnings $6,848 $2,420
Other comprehensive income:
Foreign currency translation adjustment 27,525 8,148
Unrealized gain (loss) on interest rate swap 660 (1,580)
Pension liability adjustment, net of tax (103) (6,266)
-------- --------
Total other comprehensive income 28,082 302
-------- --------
Comprehensive income $ 34,930 $ 2,722
======== ========
Note 5: Restructuring Expense
Restructuring expense reflects the cost reduction programs currently being
implemented by the Company. These include the closing of facilities and the
termination of employees. Effective January 1, 2003, restructuring costs are
accounted for under Statement of Financial Accounting Standards No. 146,
Accounting for Costs Associated with Exit or Disposal Activities. This Statement
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. Because these costs are
recorded based upon estimates, our actual expenditures for the restructuring
activities may differ from the initially recorded costs. We could be required
either to record additional expenses in future periods, if the initial estimates
were too low, or to reverse part of the charges that we recorded initially.
Quarter Ended March 31, 2003
The Company recorded restructuring expense of $687,000 for the quarter
ended March 31, 2003. Restructuring of European operations included $557,000 of
employee termination costs covering 45 technical, production, administrative and
support employees located in France, Hungary, Portugal and Austria. The
remaining $130,000 of restructuring expense related to termination costs for 15
technical, production, administrative and support employees located in the
United States. The restructuring expense was incurred as part of the cost
reduction programs currently being implemented by the Company. Activity related
to these costs is as follows (in thousands, except number of employees):
Number of
Workforce Employees
Reduction Terminated Total
--------- ---------- ------
Restructuring expense $ 687 60 $ 687
Utilized (286) (43) (286)
----- ----- -----
Balance at March 31, 2003 $ 401 17 $ 401
===== ===== =====
9
Quarter Ended March 31, 2002
The Company recorded restructuring expense of $3,024,000 for the quarter
ended March 31, 2002. Restructuring of European and Israeli operations included
$1,292,000 of employee termination costs covering approximately 234 technical,
production, administrative and support employees located in the Czech Republic,
France, Hungary, Israel, Portugal and Austria. The remaining $1,732,000 of
restructuring expense related to termination costs for approximately 194
technical, production, administrative and support employees located in the
United States.
Year Ended December 31, 2002
Restructuring expense was $30,970,000 for the year ended December 31,
2002. Restructuring of European and Israeli operations included $10,698,000 of
employee termination costs covering approximately 778 technical, production,
administrative and support employees located in the Czech Republic, France,
Hungary, Israel, Portugal and Austria. An additional $7,909,000 of restructuring
expense related to termination costs for approximately 660 technical,
production, administrative and support employees in the United States. The
remaining $12,363,000 of restructuring expense related to the noncash write-down
of buildings and equipment that are no longer in use. The restructuring expense
was incurred as part of the cost reduction programs being implemented by the
Company. The restructuring activities related to existing business were designed
to reduce both fixed and variable costs, particularly in response to the reduced
demand for our products occasioned by the electronics industry downturn which
began in 2001. Activity related to these costs is as follows (in thousands,
except number of employees):
Number of
Workforce Asset Employees
Reduction Impairment Terminated Total
---------- ---------- ---------- --------
Restructuring expense $ 18,607 $ 12,363 1,438 $ 30,970
Utilized (6,420) (12,363) (783) (18,783)
-------- -------- -------- --------
Balance at December 31, 2002 12,187 -- 655 12,187
Utilized (3,100) -- (171) (3,100)
Change in estimate (15) -- -- (15)
-------- -------- -------- --------
Balance at March 31, 2003 $ 9,072 $ -- 484 $ 9,072
======== ======== ======== ========
The remaining $9,072,000 of severance costs, currently shown in other
accrued expenses, is expected to be paid by December 31, 2003.
Year Ended December 31, 2001
Restructuring expense was $61,908,000 for the year ended December 31,
2001. Restructuring of European, Asia Pacific, and Israeli operations included
$27,064,000 of employee termination costs covering approximately 3,778
technical, production, administrative and support employees located in France,
Hungary, Portugal, Austria, the Philippines, Germany and Israel. The European
operations also recorded $2,191,000 of non-cash costs associated with the
write-down of buildings and equipment that are no longer in use. An additional
$13,870,000 of restructuring expense related to termination costs for
approximately 1,885 technical, production, administrative
10
and support employees in the United States. The remaining $18,783,000 of
restructuring expense related to the non-cash write-down of buildings and
equipment in the United States that are no longer in use.
Activity related to these costs is as follows (in thousands, except
number of employees):
Number of
Workforce Asset Employees
Reduction Impairment Terminated Total
---------- ---------- ---------- --------
Restructuring expense $ 40,934 $ 20,974 5,663 $ 61,908
Utilized (18,114) (20,974) (4,913) (39,088)
-------- -------- -------- --------
Balance at December 31, 2001 22,820 -- 750 22,820
Utilized (19,865) -- (612) (19,865)
Changes in estimate (1,391) -- -- (1,391)
-------- -------- -------- --------
Balance at December 31, 2002 1,564 -- 138 1,564
Utilized (1,026) -- (43) (1,026)
Changes in estimate -- 22 -- 22
-------- -------- -------- --------
Balance at March 31, 2003 $ 538 $ 22 95 $ 560
======== ======== ======== ========
The remaining $560,000 of severance costs, currently shown in other
accrued expenses, is expected to be paid by December 31, 2003.
Note 6: Acquisitions
As part of the Company's growth strategy, the Company seeks to expand
through the acquisition of other manufacturers of electronic components that
have established positions in major markets, reputations for product quality and
reliability, and product lines with which the Company has substantial marketing
and technical expertise. In the past two years, the Company has taken advantage
of the downturn in the electronics industry and the strength of its own balance
sheet to acquire businesses for consideration that the Company believes was
lower than what it would have been required to pay in other economic
environments. In pricing an acquisition, the Company focuses primarily on the
target's revenues and customer base, the strategic fit of its product line with
the Company's existing product offerings, opportunities for cost cutting and
integration with the Company's existing operations and production and other
post-acquisition synergies rather than on the target's assets, such as its
property, equipment and inventory. As a result, the fair value of the acquired
assets may correspond to a relatively smaller portion of the acquisition price,
with the Company recording a substantial amount of goodwill related to the
acquisition.
On November 2, 2001, the Company acquired General Semiconductor, Inc., a
leading manufacturer of rectifiers and power management devices, following
approval of the transaction and related matters by stockholders of the two
companies, for $554.8 million, including acquisition expenses of $7.0 million.
In connection with the General Semiconductor acquisition, the Company recorded
restructuring liabilities of $94,643,000 in connection with an exit plan that
management began to formulate prior to the acquisition date. The exit plan
includes downsizing certain European and Taiwan facilities and moving production
to low labor cost areas such as Israel, the Czech Republic, and China. The exit
plan should be completed by the third quarter of 2003. The plan also
11
includes reducing selling, general and administrative expenses through the
integration or elimination of redundant sales offices and administrative
functions at General Semiconductor. The goal of the Company is to achieve
significant production cost savings through the transfer and expansion of
manufacturing operations to regions such as Israel, the Czech Republic, and the
People's Republic of China, where the Company can take advantage of lower labor
costs and available tax and other government-sponsored incentives. Approximately
$88,242,000 of the restructuring liabilities recorded in connection with the
acquisition related to employee termination costs covering approximately 1,460
technical, production, administrative and support employees located in the
United States, Europe and the Pacific Rim. The remaining $6,401,000 of
restructuring liabilities related to provisions for lease cancellations and
other costs. The restructuring liability is included in other accrued expenses
on the consolidated balance sheet and the workforce reduction costs are expected
to be paid out by December 31, 2003. The other costs are expected to be paid out
by 2005. Any changes in estimates to the restructuring liability have changed
the purchase allocation. A rollforward of the activity related to these
restructuring liabilities is as follows (in thousands, except number of
employees):
Number of
Workforce Employees
Reduction Other Terminated Total
---------- -------- ---------- --------
Balance at January 1, 2002 $ 88,242 $ 6,401 1,460 $ 94,643
Utilized (52,118) (1,249) (426) (53,367)
Changes in estimate (7,900) -- (147) (7,900)
-------- -------- -------- --------
Balance at December 31, 2002 28,224 5,152 887 33,376
Utilized (3,351) (2,306) (70) (5,657)
-------- -------- -------- --------
Balance at March 31, 2003 $ 24,873 $ 2,846 817 $ 27,719
======== ======== ======== ========
In January 2002, the Company acquired the transducer and strain gage
businesses of Sensortronics, Inc. Sensortronics is a leading manufacturer of
load cells and torque transducers for domestic and international customers in a
wide range of industries with manufacturing facilities in Covina, California,
Costa Rica, and, pursuant to a joint venture arrangement, India. The acquisition
included the wholly-owned subsidiary of Sensortronics, JP Technologies, a
manufacturer of strain gages, located in San Bernardino, California. The
purchase price was $10 million in cash. The purchase price has been allocated,
with resulting goodwill of $3,027,000. The results of operations of
Sensortronics are included in the results of the passives segment from January
31, 2002.
In June 2002, the Company acquired Tedea-Huntleigh BV, a subsidiary of
Tedea Technological Development and Automation Ltd. Tedea-Huntleigh BV is
engaged in the production and sale of load cells used in digital scales by the
weighing industry. The purchase price was approximately $21 million in cash.
Additionally, Vishay will pay Tedea a $1 million consulting fee over a
three-year period and repaid a $9 million loan of Tedea to Tedea-Huntleigh.
Tedea-Huntleigh operates two plants in Israel, in Netanya and Carmiel, where it
employs approximately 350 people, as well as a number of facilities outside
Israel. Tedea-Huntleigh also has load cell operations in the
12
People's Republic of China. The purchase price has been allocated, with
resulting goodwill of $13,841,000. Results of operations are included in the
results of the passives segment beginning July 1, 2002.
On July 31, 2002, the Company acquired the BLH and Nobel businesses of
Thermo Electron Corporation. BLH and Nobel are engaged in the production and
sale of load cell-based process weighing systems, weighing and batching
instruments, web tension instruments, weighing scales, servo control systems,
and components relating to load cells including strain gages, foil gages, and
transducers. The purchase price was $18.5 million in cash. The purchase price
has been allocated, with resulting goodwill of $11,262,000. The results of
operations are included in the results of the passives segment beginning August
1, 2002.
In October 2002, the Company acquired Celtron Technologies. Celtron is
engaged in the production and sale of load cells used in digital scales for the
weighing industry, with manufacturing facilities and offices in Taiwan, the
People's Republic of China and California. The purchase price of $13.5 million
in cash has been allocated, with resulting goodwill of $4,711,000.
On December 13, 2002, the Company acquired BCcomponents Holdings B.V., a
leading manufacturer of passive components with operations in Europe, India and
the Far East. The product lines of BCcomponents include linear and non-linear
resistors; ceramic, film and aluminum electrolytic capacitors; and switches and
trimming potentiometers.
Vishay acquired the outstanding shares of BCcomponents in exchange for
ten-year warrants to acquire 7,000,000 shares of Vishay common stock at an
exercise price of $20.00 per share and ten-year warrants to acquire 1,823,529
shares of Vishay common stock at an exercise price of $30.30 per share. The fair
value of the warrants ($39,462,000) was determined using the Black-Scholes
method. Significant assumptions used included an expected dividend yield of 0%,
a risk free interest rate of 3%, an expected volatility of 66%, and an expected
life of five years.
In the transaction, outstanding obligations of BCcomponents, including
indebtedness and transaction fees and expenses, in the amount of approximately
$224 million were paid ($191,000,000) or assumed ($33,000,000). Also, $105
million in principal amount of BCcomponents' mezzanine indebtedness and certain
other securities of BCcomponents were exchanged for $105 million principal
amount of floating rate unsecured loan notes of Vishay due 2102. The Vishay
notes bear interest at LIBOR plus 1.5% through December 31, 2006 and at LIBOR
thereafter. The interest rate may be further reduced to 50% of LIBOR after
December 31, 2010 if the price of Vishay common stock trades above a specified
target price, as provided in the notes. The notes are subject to a put and call
agreement under which the holders may at any time put the notes to Vishay in
exchange for 6,176,471 shares of Vishay common stock in the aggregate, and
Vishay may call the notes in exchange for cash or for shares of its common stock
after 15 years from the date of issuance. The purchase price was as follows:
Cash consideration $191,000,000
Warrants issued 39,462,000
Acquisition costs 3,000,000
------------
Total purchase price $233,462,000
============
13
Under purchase accounting, the total purchase price is allocated to assets
acquired and liabilities assumed based on their estimated fair values. The
allocation of the purchase price is based on a preliminary evaluation of the
fair value of BCcomponents' tangible and identifiable intangible assets acquired
and liabilities assumed at the date of the merger based upon currently available
information. There can be no assurance that the estimated amounts will represent
the final purchase allocation. The purchase price has been preliminarily
allocated, pending finalization of appraisals for property, plant, and
equipment, debt, intangible assets and warrants, to the acquired assets and
liabilities based on fair values as follows:
Current assets $ 91,859,000
Property, plant, and equipment 127,626,000
Other assets 3,054,000
Trademarks 21,000,000
Completed technology 22,000,000
Current liabilities (118,425,000)
Long-term debt (126,328,000)
Other noncurrent liabilities (29,860,000)
Goodwill 242,536,000
-------------
Total purchase price $ 233,462,000
=============
In connection with the BCcomponents acquisition, the Company recorded
restructuring liabilities of $48,000,000 in connection with an exit plan that
management began to formulate prior to the acquisition date. Approximately
$46,000,000 of these liabilities relate to employee termination costs covering
approximately 780 technical, production, administrative and support employees
located in the United States, Europe and the Pacific Rim. The restructuring
liability is recorded in other accrued expenses and is expected to be paid out
by December 31, 2003. The exit plan is not yet finalized. Future adjustments
that increase or decrease the restructuring liabilities would increase or
decrease goodwill. A rollforward of the activity related to these restructuring
liabilities is as follows (in thousands, except number of employees):
Number of
Workforce Employees
Reduction Other Terminated Total
-------- -------- ---------- --------
Balance at January 1, 2003 $ 45,855 $ 1,939 780 $ 47,794
Utilized (5,077) (26) (70) (5,103)
-------- -------- -------- --------
Balance at March 31, 2003 $ 40,778 $ 1,913 710 $ 42,691
======== ======== ======== ========
14
Had the acquisitions been made as of January 1, 2002, the Company's pro
forma results would have been (in thousands, except per share amounts):
Three Months Ended
March 31, 2002
---------------------
Net sales $517,672
Net loss $ (2,378)
Basic loss per share $ (0.01)
Diluted loss per share $ (0.01)
Note 7: Stock-Based Compensation
SFAS No. 123, Accounting for Stock-Based Compensation, encourages entities
to record compensation expense for stock-based employee compensation plans at
fair value but provides the option of measuring compensation expense using the
intrinsic value method prescribed in APB Opinion No. 25, Accounting for Stock
Issued to Employees. The Company accounts for stock-based compensation in
accordance with APB 25 and related interpretations. The following is provided to
comply with the disclosure requirements of SFAS 123 as amended. If compensation
cost for the Company's stock option programs had been determined using the
fair-value method prescribed by SFAS 123, the Company's results would have been
reduced to the pro forma amounts indicated below (in thousands, except per share
amounts):
Three Months Ended
March 31,
-------------------------
2003 2002
-------------------------
Net income, as reported $ 6,848 $ 2,420
Deduct: Total stock-based
employee compensation expense
determined under fair
value-based method for all
awards, net of related
tax effects 467 611
-------------------------
Pro forma net income $ 6,381 $ 1,809
=========================
Earnings per share:
Basic--as reported $ 0.04 $ 0.02
=========================
Basic--pro forma $ 0.04 $ 0.01
=========================
Diluted--as reported $ 0.04 $ 0.02
=========================
Diluted--pro forma $ 0.04 $ 0.01
=========================
15
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Overview
Vishay operates in two segments, passive components and active components.
The Company is the leading manufacturer of passive components in the United
States and Europe. These components include resistors, capacitors, inductors,
strain gages and load cells. Vishay is also one of the world's leading
manufacturers of active electronic components, also referred to as discrete
semiconductors. These include transistors, diodes, rectifiers, certain types of
integrated circuits and optoelectronic products. Historically, the passive
components business had predominated at Vishay, until the purchase of General
Semiconductor in November 2001, after which the active business took
predominance. The acquisition of BCcomponents in December 2002 has shifted the
predominance back to the passive business. Revenues for the three months ended
March 31, 2003 were derived 52% from the Company's passive business and 48% from
its active business.
Market conditions in the electronics industry remain difficult. The
results for the first quarter continue to reflect the impact of the current weak
economy. However, there was an unexpected recovery beginning in February 2003
experienced across several product and market segments. Short-term orders
increased predominately in the passive business from contract equipment
manufacturers and from the automotive market. It is not currently known whether
this recovery will be sustained. This follows a difficult 2002 and 2001, in
which the electronic components business generally was depressed both in the
United States and much of the world. This economic environment has affected both
the passive and active component businesses. The Company's book-to-bill ratio
for the first quarter was 1.05, reflecting a book-to-bill ratio for the active
business of 1.03 and a book-to-bill ratio for the passive business of 1.07. The
Company's backlog was $438.2 million at the end of the first quarter, a $30.6
million increase from the previous quarter.
The following table shows the end-of-period backlog and the book-to-bill
ratio for Vishay's business as a whole during the five quarters beginning with
the 1st quarter of 2002 through the first quarter of 2003.
1st Quarter 2002 2nd Quarter 2002 3rd Quarter 2002 4th Quarter 2002 1st Quarter 2003
---------------- ---------------- ---------------- ---------------- ----------------
End of Period
Backlog $ 396,900,000 $ 421,500,000 $ 378,500,000 $ 407,600,000(1) $ 438,200,000(1)
Book-to-Bill
Ratio 1.14 1.02 0.90 0.93 1.05
(1) Includes $49,800,000 and $49,500,000 of backlog attributable to the
business of BCcomponents for the fourth quarter of 2002 and the first
quarter of 2003, respectively. BCcomponents was acquired in December 2002.
16
The following table shows sales and book-to-bill ratios broken out by
segment for the five quarters beginning with the first quarter of 2002 through
the first quarter of 2003:
1st Quarter 2002 2nd Quarter 2002 3rd Quarter 2002 4th Quarter 2002 1st Quarter 2003
---------------- ---------------- ---------------- ---------------- ----------------
Passive Components
- ------------------
Sales $ 184,572,000 $ 187,430,000 $ 196,702,000 $ 198,542,000 $ 274,874,000(1)
Book-to-Bill
Ratio 1.02 0.98 0.96 1.00 1.07
Active Components
- -----------------
Sales $ 249,568,000 $ 270,447,000 $ 274,717,000 $ 260,835,000 $ 257,253,000
Book-to-Bill
Ratio 1.22(2) 1.04 0.85 0.88 1.03
(1) Includes $69,300,000 attributable to BCcomponents for the first quarter of
2003.
(2) The book-to-bill ratio for the active components for the quarter ended
March 31, 2002 reflected, in part, an unusual spike in orders in March
2002.
The Company continued to implement its cost control programs during the
quarter with an emphasis on the reduction and reallocation of headcount. A major
element of the Company's cost control strategy has been to position its
manufacturing facilities, to the extent practicable, in jurisdictions with low
labor costs. The percentage of headcount in low labor cost countries was 65% as
of March 31, 2003. The Company continues to target improvement in this area with
the continued integration of the business of BCcomponents.
Income statement captions as a percentage of sales, and the effective tax
rates, were as follows:
Three Months Ended
March 31,
2003 2002
---- ----
Costs of products sold 77.7 % 80.0 %
Gross profit 22.3 20.0
Selling, general and
administrative expenses 18.2 17.2
Operating income 4.0 2.1
Earnings before income
taxes and minority interest 2.2 1.1
Net earnings 1.3 0.6
Effective tax rate 24.9 % 16.5 %
17
Net Sales, Gross Profits and Margins
Net sales for the quarter ended March 31, 2003 increased $97,987,000 or
22.6% as compared to the comparable prior year period. The increase primarily
reflects the acquisitions of BCcomponents in December 2002, Celtron Technologies
in October 2002, BLH and Nobel in July 2002 and Tedea-Huntleigh BV in June 2002.
Excluding these acquisitions, net sales increased $10,587,000 or 2.4%. Foreign
exchange rates during the quarter positively impacted revenues by $22,300,000.
In the passive components business, pricing continues to stabilize in the
resistor and inductor product lines, and a slow recovery has begun in the
capacitor product line. Active component revenues increased only slightly for
the quarter ended March 31, 2003 as compared to the comparable prior year
period, reflecting the slowdown in the laptop computer market.
Costs of products sold as a percentage of net sales for the quarter ended
March 31, 2003 were 77.7% as compared to 80.0% for the comparable prior year
period. Gross profit as a percentage of net sales for the quarter ended March
31, 2003 was 22.3% as compared to 20.0% for the comparable prior year period.
Price declines were offset by volume increases and cost savings programs.
The following tables show sales and gross profit margins separately for
our passive and active segments.
Passive Components
Three Months Ended
March 31,
2003 2002
------------ ------------
Net Sales $274,874,000 $184,572,000
Gross Profit
Margin 19.4% 10.8%
Net sales of the passive components business for the quarter ended March
31, 2003 increased $90,302,000, or 48.9%, as compared to the comparable prior
year period. Without the acquisition of BCcomponents, Celtron Technologies, BLH
and Nobel, and Tedea-Huntleigh, the passive components business sales would have
increased by $2,900,000, or 1.6%, for the quarter ended March 31, 2003 as
compared to the comparable prior year period. The increase in net sales can be
attributed to the volume increases in the resistor and inductor product lines,
partially offset by price declines and the positive impact of foreign currency
exchange rates. The average selling price decline has slowed in the resistor and
inductor product lines and further stabilization is expected due to the
BCcomponents acquisition. The capacitor product line continues to struggle, with
the average selling price down 9% from the prior year. However, there are
indications of the start of a slow recovery. Gross margins were 19.4% for the
quarter ended March 31, 2003 as compared to 10.8% for the comparable prior year
period. This increase is mainly due to the acquisitions noted above. The gross
profit margin at BCcomponents for the quarter ended March 31, 2003 was 20.9% and
the gross profit margins for the measurements group acquisitions ranged from
31.0% to 45.0%. Several significant cost reduction programs have been initiated
in all of the products lines, including facility combinations and shifting
production to lower cost regions. The impact of these cost savings plans
18
has been partially offset by the underutilization of capacity in the commodity
products. Additionally, a write-down of $1,500,000 of palladium inventory was
taken in the quarter ended March 31, 2003.
Active Components
Three Months Ended
March 31,
2003 2002
------------ ------------
Net Sales $257,253,000 $249,568,000
Gross Profit
Margin 25.3% 26.9%
Net sales of the active components business for the quarter ended March
31, 2003 increased by $7,685,000, or 3.1%, from sales of the comparable prior
year period. Pricing pressure continues to increase in our active components
business. Our Siliconix operation experienced an increase in sales during this
period, mainly due to the market shift from single-function cellular phones to
multiple- function cellular phones, which utilize more of the Company's
components. This increase was partially offset by the slowdown in the laptop
computer market and a slight decline in sales in our other semiconductor
businesses. Net sales also increased due to the positive impact of foreign
currency exchange rates. Gross margins were 25.3% for the quarter ended March
31, 2003 as compared to 26.9% for the comparable prior year period. Margins were
negatively impacted by product mix changes at our Siliconix business where there
was a higher share of commodity products as compared to the prior year.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses for the quarter ended March
31, 2003 were 18.2% of net sales as compared to 17.2% for the comparable prior
year period. This increase was mainly due to the acquisition of BCcomponents.
The Company continues to implement cost reduction initiatives company-wide, with
particular emphasis placed on reducing headcount in high labor cost countries.
Sixty five percent of the Company's labor force is in low labor cost countries.
Additionally, the Company has recorded $1.0 million of expenses for the quarter
ended March 31, 2003 associated with improving internal controls in response to
the provisions of the Sarbanes-Oxley Act.
Restructuring Expense
Our restructuring activities have been designed to cut both fixed and
variable costs, particularly in response to the reduced demand for products
occasioned by the electronics industry downturn beginning in 2001. These
activities include the closing of facilities and the termination of employees.
Restructuring costs are accounted for under Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated with Exit or Disposal
Activities. This Statement requires that a liability for a cost associated with
an exit or disposal activity be recognized when the liability is incurred.
Because costs are recorded based upon estimates, actual expenditures for the
restructuring activities may differ from the initially recorded costs. If the
initial estimates were too
19
low or too high, we could be required either to record additional expenses in
future periods or to reverse previously recorded expenses. We anticipate that we
will realize the benefits of our restructuring through lower labor costs and
other operating expenses in future periods, although it is not possible to
quantify the expected savings.
The Company recorded restructuring expense of $687,000 for the quarter
ended March 31, 2003. Restructuring of European operations included $557,000 of
employee termination costs covering 45 technical, production, administrative and
support employees located in France, Hungary, Israel, Portugal and Austria. The
remaining $130,000 of restructuring expense related to termination costs for 15
technical, production, administrative and support employees located in the
United States.
The Company recorded restructuring expense of $3,024,000 for the quarter
ended March 31, 2002. Restructuring of European and Israeli operations included
$1,292,000 of employee termination costs covering approximately 234 technical,
production, administrative and support employees located in the Czech Republic,
France, Hungary, Israel, Portugal and Austria. The remaining $1,732,000 of
restructuring expense related to termination costs for approximately 194
technical, production, administrative and support employees located in the
United States.
Restructuring expense is separate from plant closure, employee termination
and similar integration costs we incur in connection with our acquisition
activities. These amounts are included in the costs of our acquisitions and do
not affect earnings or losses on our statement of operations.
Interest Expense
Interest expense for the quarter ended March 31, 2003 increased by
$3,092,000 as compared to the comparable prior year period. This increase was
primarily a result of the various acquisitions made in 2002. The Company
borrowed $116,000,000 on its revolving credit facility and issued $105,000,000
principal amount of unsecured loan notes, currently bearing interest at LIBOR
plus 1.5%, in connection with the BCcomponents acquisition in December 2002.
Other Income
Other income was $643,000 for the quarter ended March 31, 2003, down
$1,906,000 as compared to other income of $2,549,000 for the comparable prior
year quarter. This decrease was primarily due to higher foreign exchange losses.
Foreign exchange losses of $1,272,000 were reported for the quarter ended March
31, 2003 as compared to foreign exchange gains of $713,000 for the comparable
prior year period.
Minority Interest
Minority interest for the quarter ended March 31, 2003 increased $353,000
as compared to the comparable prior year period. This increase was primarily due
to the increase in net earnings of Siliconix.
Income Taxes
The effective tax rate, based on earnings before income taxes and minority
interest, for the first quarter of 2003 was 24.9% as compared to 16.5% for the
comparable prior year period. The
20
higher effective tax rate in 2003 is due primarily to the fact that the Company
did not recognize the tax benefit of losses incurred in certain high tax
jurisdictions. While those losses are available to offset future taxable income,
accounting rules do not allow for the recognition of the benefit currently.
The Company enjoys favorable tax rates on its operations in Israel. Such
rates are applied to specific approved projects and are normally available for a
period of ten or fifteen years. The low tax rates in Israel applicable to the
Company ordinarily have resulted in increased earnings compared to what earnings
would have been had statutory United States tax rates applied, but, due to
losses reported in Israel, there was no material impact on net earnings for the
quarters ended March 31, 2003 and 2002, respectively.
Financial Condition and Liquidity
Cash flows from operations were $27,943,000 for the quarter ended March
31, 2003 as compared to $111,234,000 for the quarter ended March 31, 2002. For
the quarter ended March 31, 2002, there were significant reductions in accounts
receivable and inventory in response to the business slowdown. Accounts
receivable levels at March 31, 2003 have increased significantly due to the
upturn in orders beginning in February. This increase was only partially offset
by inventory reductions, higher net income and depreciation and amortization.
Net purchases of property and equipment for the quarter ended March 31, 2003
were $24,173,000 as compared to $14,073,000 for the comparable prior year
period. This increase was mainly due to spending at our Electro-Films location,
where the facility is being rebuilt after a fire in 2002. This facility had
approximately $8.0 million of capital spending in the first quarter of 2003.
Purchase of businesses, net of cash acquired, for the three months ended March
31, 2003 represents payments made related to liabilities assumed from previous
acquisitions.
The Company paid down $20,000,000 on its revolving credit lines during the
first quarter of 2003, primarily from the cash generated from operations. At
March 31, 2003, the Company had $91,000,000 outstanding under its revolving
credit facility. In connection with our acquisition of BCcomponents in December
2002, we issued $105,000,000 principal amount of our floating rate unsecured
loan notes due 2102. The notes bear interest at LIBOR plus 1.5% through December
31, 2006 and at LIBOR thereafter. The interest payable on the notes may be
further reduced to 50% of LIBOR after December 31, 2010 if the price of our
common stock trades above a specified target price, as provided in the notes.
The notes are subject to a put and call agreement under which the holders may at
any time put the notes to us in exchange for 6,176,471 shares of our common
stock in the aggregate, and we may call the notes in exchange for cash or for
shares of our common stock after 15 years from the date of issuance.
The Company's financial condition at March 31, 2003 was strong, with a
current ratio of 2.64 to 1. The Company's ratio of long-term debt, less current
portion, to stockholders' equity was .29 to 1 at March 31, 2003 as compared to
..23 to 1 at March 31, 2002 and .30 to 1 at December 31, 2002. The increase in
long-term debt ratio from March 31, 2002 to March 31, 2003 reflects the debt
incurred in connection with the BCcomponents acquisition.
21
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
Statements in this report that are not clearly historical are
"forward-looking statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These include, but are not limited to,
anticipated results for the rest of 2003 and expectations with respect to
recoveries in the economic and business climate in general and the Company's
businesses in particular. All forward-looking statements made by or on behalf of
the Company involve risks, uncertainties and contingencies, whether they are
contained in this report or other reports and documents filed with the
Securities and Exchange Commission, in press releases or in communications and
discussions with investors and analysts through meetings, webcasts, phone calls
or conference calls. Many of these risks, uncertainties and contingencies are
beyond the Company's control, and they may cause actual results, performance or
achievements to differ materially from those anticipated. Please refer to the
Company's 2002 Annual Report on Form 10-K for important factors that could cause
the Company's actual results, performance or achievements to differ materially
from those in any forward-looking statements made by or on behalf of the
Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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's policy does not allow
speculation in derivative instruments for profit or execution of 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
borrowings under its floating rate revolving credit facility. 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 March 31, 2003, a
fixed rate swap agreement with a notional amount of $100,000,000 was in place.
The impact of interest rate derivative instruments on the Company's results of
operations for the quarter ended March 31, 2003 was not significant.
Item 4. Disclosure Controls and Procedures
An evaluation was performed as of a date within 90 days prior to the
filing date of this quarterly report, under the supervision and with the
participation of the Company's management, including the CEO and CFO, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on that evaluation, the Company's management,
22
including the CEO and CFO, concluded that the Company's disclosure controls and
procedures are effective in ensuring that all material information required to
be filed in this quarterly report has been made known to them in a timely
fashion. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to the date management completed their evaluation.
23
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:
Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 - Dr. Felix Zandman, Chief Executive Officer
Exhibit 99.2 - Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 - Richard N. Grubb, Chief Financial Officer
(b) Reports on Form 8-K:
On January 23, 2003, the Company filed a current report under
Item 5 of Form 8-K, regarding the Company's write-down of its
current inventory of tantalum powder and wire and an accrual
for its commitments under contracts for the supply of
tantalum. The date of the form was January 21, 2003.
On February 26, 2003, the Company filed a current report under
Item 7 of Form 8-K/A, providing the required financial
statements of BCcomponents and the required pro forma
financial information giving effect to the
24
Company's purchase of BCcomponents in December 2002. The form
was dated December 13, 2002 and amended the Form 8-K
previously filed by the Company on December 23, 2002.
25
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: May 15, 2003
26
CERTIFICATIONS
I, Dr. Felix Zandman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vishay
Intertechnology, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 15, 2003
/s/ Dr. Felix Zandman
- -----------------------
Dr. Felix Zandman
Chief Executive Officer
27
I, Richard N. Grubb, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Vishay
Intertechnology, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 15, 2003
/s/ Richard N. Grubb
- -------------------------
Richard N. Grubb
Chief Financial Officer
28
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Vishay Intertechnology, Inc. (the
"Company") on Form 10-Q for the quarterly period ending March 31, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Dr. Felix Zandman, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section
906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Dr. Felix Zandman
- -------------------------
Dr. Felix Zandman
Chief Executive Officer
May 15, 2003
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Vishay Intertechnology, Inc. (the
"Company") on Form 10-Q for the quarterly period ending March 31, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Richard N. Grubb, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section
906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Richard N. Grubb
- --------------------------
Richard N. Grubb
Chief Financial Officer
May 15, 2003