SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported):
March 2, 1998
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VISHAY INTERTECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-7416 38-168645 3
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
63 Lincoln Highway, Malvern, PA 19355
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 644-1300
Not Applicable
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(Former name or former address, if changed since last report)
This Form 8-K/A amends the Form 8-K filed on March 17, 1998. The following items
have been amended:
Item 7.Financial Statements, Pro Forma Financial Information and
Exhibits
(a) Financial Statement of business acquired.
Set forth on pages 1 through 24 are the financial
statements of the business acquired, required to be set
forth in the Registrant's Current Report on Form 8-K,
dated March 17, 1998, which report is hereby amended. The
following are included:
Independent Auditors' Report.
Combined Balance Sheet -- December 31, 1997.
Combined Statement of Revenues and Expenses for the year
ended December 31, 1997.
Combined Statement of Cash Flow for the year ended
December 31, 1997.
Notes to Combined Financial Statements.
(b) Pro Forma Financial Information.
Set forth on pages 25 through 29 is pro forma financial
information required to be set forth in the Registrant's
Current Report on Form 8-K, dated March 17, 1998, which
report is hereby amended. The following are included:
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
-- December 31, 1997.
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited) -- Year ended December 31, 1997.
Notes to Pro Forma Condensed Consolidated Financial Statements
(Unaudited).
(c) Exhibits.
23 -- Consent of Independent Accountants.
INDEPENDENT AUDITORS' REPORT
To the Stockholders of the
TEMIC Semiconductor Business
We have audited the accompanying combined balance sheet of the TEMIC
Semiconductor Business ("TEMIC") of Daimler-Benz Aktiengesellschaft (as
described in Note 1 to the combined financial statements) as of December 31,
1997, and the related combined statements of revenues and expenses and cash flow
for the year then ended. These combined financial statements are the
responsibility of TEMIC's management. Our responsibility is to express an
opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
in Germany and the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of TEMIC as of December
31, 1997 and the result of their operations and their cash flows for the year
then ended in conformity with generally accepted accounting principles in
Germany.
Generally accepted accounting principles in Germany vary in certain significant
respects from generally accepted accounting principles in the United States
(U.S. GAAP). Application of generally accepted accounting principles in the
United States would have affected the results of operations for the year ended
December 31, 1997 and equity as of December 31, 1997, to the extent summarized
in Note 2 to the combined financial statements.
KPMG DEUTSCHE TREUHAND-GESELLSCHAFT AG
Stuttgart, Germany
May 14, 1998
TEMIC SEMICONDUCTOR BUSINESS
COMBINED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS OF DEUTSCHE MARKS)
A. FIXED ASSETS
I. Intangible Assets
1. Concessions, industrial and similar rights and assets
and licenses in such rights and assets 21,418
2. Software 13,044
3. Goodwill 312
----------------
34,774
----------------
II. Tangible Assets
1. Land, leasehold rights and buildings including buildings
on third party land 133,235
2. Technical equipment and machines 347,469
3. Other equipment, factory and office equipment 42,238
4. Payments on account and assets under construction 42,279
----------------
565,221
----------------
III. Financial Assets
1. Shares in affiliated companies 945
2. Loans to affiliated companies 604
3. Shares in associated companies 19,512
4. Securities 3,221
5. Other loans 233
----------------
24,515
----------------
B. CURRENT ASSETS
I. Inventories
1. Raw materials and supplies 53,374
2. Work-in-process 134,520
3. Finished goods and goods purchased for resale 79,560
4. Advance payments on inventories and assets under
construction 6,629
----------------
274,083
----------------
II. Receivables and other assets
1. Trade receivables 288,528
2. Receivables from affiliated companies 26,221
3. Receivables from enterprises in which participating
interests are held 1,746
4. Other assets 60,261
----------------
376,756
----------------
IV. Cheques, cash-in-hand, bank balances 33,540
----------------
C. PREPAID EXPENSES 3,192
================
1,312,081
================
2
TEMIC SEMICONDUCTOR BUSINESS
COMBINED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS OF DEUTSCHE MARKS)
A. EQUITY
I. Subscribed capital 80,000
II. Capital reserves 138,463
III. Accumulated deficit (19,997)
IV. Minority interests:
Daimler-Benz Group 215,260
Other 66,600
-----------------
480,326
-----------------
B. ACCRUALS
1. Accruals for pensions and similar obligations 84,557
2. Tax accruals 19,872
3. Other accruals 122,771
-----------------
227,200
-----------------
C. LIABILITIES
1. Bank borrowings 163,769
2. Payments received on account of orders 270
3. Trade payables 129,705
4. Liabilities on bills accepted and drawn 5,669
5. Payables to affiliated companies 208,626
6. Payables to enterprises in which participating interests
are held 940
7. Other liabilities 95,576
-----------------
604,555
=================
1,312,081
=================
3
TEMIC SEMICONDUCTOR BUSINESS
COMBINED STATEMENT OF REVENUES AND EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS OF DEUTSCHE MARKS)
SALES 1,530,965
Cost of sales (1,140,976)
Research and development cost (121,480)
-----------------
GROSS MARGIN 268,509
-----------------
Selling expenses (203,202)
General administration expenses (53,048)
Other operating income 28,272
Other operating expense (15,021)
-----------------
(242,999)
-----------------
Loss from participations (487)
Net other financial income (expense) (61)
Net interest income (expense) (14,830)
-----------------
NET FINANCIAL INCOME (EXPENSE) (15,378)
RESULTS FROM ORDINARY ACTIVITIES 10,132
Extraordinary income 16,817
Income taxes (11,420)
NET INCOME BEFORE MINORITY INTEREST 15,529
================
Accumulated deficit - beginning of the year (2)
Minority interests in net earnings/ losses of subsidiaries:
Daimler-Benz Group (Note 1) (50,865)
Other (421)
Releases from/transfers to reserves 13,735
Currency conversion differences 2,027
=================
ACCUMULATED DEFICIT - END OF THE YEAR (19,997)
=================
4
TEMIC SEMICONDUCTOR BUSINESS
COMBINED STATEMENT OF CASH FLOW
FOR THE YEAR ENEDED DECEMBER 31, 1997
(IN THOUSANDS OF DEUTSCHE MARKS)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (German GAAP) 15,529
Extraordinary income (16,817)
Depreciation and amortization 151,950
Increase in pension accruals 9,361
Loss on disposals of assets 1,753
Increase in inventories, trade receivables and other assets (50,481)
Increase in trade payables and other liabilities 29,800
-----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 141,095
-----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Disposals of fixed assets 25,817
Purchases of fixed assets (207,312)
Cash from first year consolidations 411
-----------------
NET CASH USED IN INVESTING ACTIVITIES (181,084)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Reduction in bank loans (31,417)
Increase in other loans from Daimler-Benz Group 28,457
Capital contribution 16,817
Other equity transactions 8,149
-----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 22,006
-----------------
Effects of foreign exchange rate changes on cash 1,891
-----------------
Net decrease in cash (16,092)
Cash at beginning of year 49,632
=================
CASH BALANCE AT END OF YEAR 33,540
=================
Supplemental disclosure of cash flow information
Interest paid 18,638
Income taxes paid 6,750
5
TEMIC SEMICONDUCTOR BUSINESS
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(ALL AMOUNTS IN THOUSANDS OF DEUTSCHE MARKS (KDM) UNLESS OTHERWISE STATED)
BACKGROUND
The TEMIC Semiconductor Business ("TEMIC") comprises the following indirectly
majority owned entities of Daimler-Benz AG:
O TEMIC Semiconductor GmbH, Heilbronn, Germany ("TSG"), and subsidiaries
("German Group")
O Siliconix Incorporated, Santa Clara, USA, and subsidiaries
("Siliconix Group")
0 Dialogue Semiconductors Ltd., Swindon, UK, and subsidiaries
("Dialogue Group")
Vishay Intertechnology, Inc. ("Vishay") of Malvern, Pennsylvania, USA and
certain subsidiaries have entered into a stock purchase agreement on the
acquisition of the TEMIC Semiconductor Business. The effective date for the
acquisition was February 28, 1998.
Ericsson Radio Systems AB ("Ericsson"), a minority shareholder of Dialogue
Semiconductor Limited, Swindon, UK ("Dialogue"), on February 23, 1998 exercised
a call option on the shares of Dialogue. The transaction with Ericsson occurred
subsequent to the purchase of TEMIC by Vishay. However, the Dialogue Group has
been included in the combined financial statements of the TEMIC Semiconductor
Business as of December 31, 1997. The net assets of the Dialogue Group under
German generally accepted accounting principles ("GAAP") were KDM 6,763 as of
December 31, 1997. The revenues in 1997 were KDM 75,352 and net income under
German GAAP was KDM 4, 115.
Additionally, Vishay has subsequently entered into a Share Sale and Transfer
Agreement with ATMEL Corporation, San Jose, USA ("ATMEL"). Vishay has agreed to
sell the integrated circuit division ("IC-Business") (which was part of the
acquired Semiconductor Business) to ATMEL. This transaction, once legally
effective, will become economically effective as of February 28, 1998.
The combined financial statements have been prepared under the assumption that
none of the above two sales would result in significant changes in the basis of
valuation. Therefore, any influences which could occur out of the two sales have
not been considered.
6
The Directors of TSG exercised a call option to acquire the remaining 50 % of
the issued share capital of Matra MHS S.A., Nantes, France ("Matra MHS")for a
price of 1 French Franc with written notice dated December 30, 1997. According
to the contractual agreement, the shares may only be transferred at the earliest
after 60 days have elapsed since the option was exercised.
Matra MHS has recognized as revenue grants from the French Government totally
approximately French Francs 497 millions as of December 31, 1997. There is a
provision in the grant agreements that provides that the grants may be required
to be refunded to the French Government upon certain changes in ownership of
Matra MHS. The sale and the transfer of the shares of Matra MHS to Vishay and
ATMEL could result in the French Government requesting repayment of all or part
of these grants. The ultimate resolution of this matter can not be determined at
this time.
7
1. DISCLOSURES TO THE FINANCIAL STATEMENTS UNDER GERMAN GAAP
The combined financial statements of TEMIC have been prepared in accordance with
the regulations of the German Commercial Code (HGB) under the assumption that
TSG is the parent entity.
COMBINED COMPANIES
The combined financial statements include all semiconductor companies which are
subsidiaries of TSG in accordance with Section 290 of the German Commercial Code
as well as subsidiaries of the Daimler-Benz Group that are industrially managed
(Siliconix Group and Dialogue Group). Significant investments in which TEMIC has
an ownership interest in the range of 20 % to 50 % ("associated companies") are
generally included using the equity method of accounting.
The combined financial statements of TEMIC include the following companies:
O TEMIC Semiconductor GmbH, Heilbronn/Germany, (until September 30, 1997
legally dependent part of TEMIC TELEFUNKEN microelectronic Gmbh,
Heilbronn/Germany) and the following subsidiaries
O TEMIC Semiconductors Itzehoe GmbH, Itzehoe/Germany
O TEMIC TELEFUNKEN microelectronic Ges.m.b.H., Vocklabruck/Austria
O TEMIC Semiconductors (Philippines) Inc., Manila/Philippines, (in
1997 legally dependent part of TEMIC TELEFUNKEN microelectronic
(Philippines) Inc., Manila/Philippines)
O Shanghai TEMIC Opto Semiconductors Company Ltd., Shanghai/China
O Shanghai TEMIC Discrete Semiconductors Company Ltd., Shanghai/China
O Matra MHS S.A., Nantes/France.
Dialogue Semiconductors Ltd., Swindon/Great Britain, and the following
subsidiaries:
O Dialog Semiconductor GmbH, Kirchheim-Teck/Germany
O Dialog Semiconductor Ltd., Swindon/Great Britain.
SiliconixInc., Santa Clara, USA, and the following subsidiaries:
O Siliconix Ltd., Bracknell/Great Britain
O Siliconix (Hong Kong) Ltd., Hong Kong/China
O Siliconix Technology C.V., Amsterdam/Netherlands
O TEMIC (S) Pte. Ltd., Singapore
O TEMIC Japan KK, Tokyo/Japan
O Siliconix (Taiwan) Ltd., Kaohsiung/Taiwan
0 TEMIC North America Inc., Basking Ridge/USA.
8
Prior to October 1, 1997 TEMIC Semiconductor GmbH was not a separate entity and
therefore the net assets as well as the income and expenses had to be extracted
from the financial statements of TEMIC TELEFUNKEN microelectronic GmbH ("TEMIC
Gmbh"). The preparation of the combined financial statements require management
to make estimates and assumptions that effect the recorded balances.
TEMIC Semiconductors (Phils.) Inc., Manila ("TSP") was founded in September 1997
and its respective financial statements are included as of December 31, 1997.
Prior to that date the semiconductor segment of TEMIC TELEFUNKEN
microelectronics (Phils.) Inc., Manila ("TMP") was not a separate entity.
The Siliconix Group and the Dialogue Group are included in the combined
financial statements using the combined method, whereby the equity is shown
under minority interests of the Daimler-Benz Group because the shares are not
owned by TSG.
All assets and liabilities of Matra MHS are fully included in the combined
financial statements as of December 31, 1997. One half of the net assets are
included within equity and the remaining 50 % are included within minority
interests (Other).
Shanghai SIMCONIX Electronic Company Limited, Shanghai, China, has been included
in the combined financial statements using the equity method of accounting
(Exhibit 3). Due to their insignificance with respect to the financial and
earnings position eleven subsidiaries have not been included in the combined
financial statements in accordance with Section 296 Paragraph 2 German
Commercial Code (Exhibit 2).
PRINCIPLES OF COMBINATION
The equity combination of the group is performed according to the book value
method as prescribed by German accounting standards. The carrying value of the
shares owned by the parent company is eliminated against the amount which these
shares represent in the equity of the subsidiary company. The elimination is
based on the values at the time of acquisition of shares or first combination of
the subsidiary in the combined financial statements.
9
The combined subsidiaries' equity amounts related to shares not owned directly
or indirectly by TSG are disclosed as minority interests.
Investments in associated companies are carried in the combined balance sheet at
an amount which corresponds to the proportionate share of the associated
company's net equity.
Intercompany balance sheet and income statement balances and transactions have
been eliminated in combination.
METHODS OF ACCOUNTING AND VALUATION
The financial statements of the combined companies have generally been prepared
in accordance with the same methods of accounting and valuation for the entire
Group. In accordance with Section 312 paragraph 5 German Commercial Code the
accounting and valuation principles of Shanghia SIMCONIX Electronic Company
Ltd., an associated company which is included in the combined financial
statements using the equity method, have not been adjusted to the accounting and
valuation principles used in the combined financial statements.
Intangible assets acquired are stated at cost and are depreciated straight line
with useful lives between 4 and 5 years.
Property and equipment are stated at acquisition or manufacturing cost.
Depreciation is based on the underlying -- and permitted for tax purposes --
useful economic lives of the assets. When applying the accelerated method, a
changeover to the straight-line method occurs when higher depreciation expense
results using this method.
At the German companies, in calculating depreciation on movable fixed assets, an
entire year's depreciation is charged to additions recorded during the first
half of the year and a half year's depreciation is charged to additions made in
the second half of the year. Low-value assets with an individual purchase price
of up to DM 800 are fully depreciated in the year of purchase and are disclosed
as disposal.
The following useful lives and depreciation rates are used in calculating
ordinary depreciation:
Useful life (years) Depreciation method
------------------------ ---------------------------------
Additions to buildings up to 12.31.1988 40 straight line
Additions to buildings after 12.31.1988 25 straight line
Technical equipment and machinery 7-10 accelerated, straight line
EDP equipment and vehicle fleet 4 straight line
Tools 2 straight line
Factory and office equipment 6-7 straight line
10
Investments in non-consolidated subsidiaries and participations and marketable
securities are carried at cost or at a lower value appropriate at the balance
sheet date. Investments in associated companies are accounted for at equity.
Other long-term investments are carried at acquisition cost. Other loans which
are low- or non-interest bearing are stated at their present value.
Inventory is valued at the lower of acquisition or manufacturing cost or market,
cost being generally determined on the basis of an average or first-in,
first-out method. Manufacturing costs comprise direct material and labor and
applicable manufacturing overheads, including depreciation charges.
Raw materials are valued at average cost. Obsolescence risks have been accounted
for.
Unfinished and finished goods are valued at manufacturing costs. Such
manufacturing costs include direct material, material related overhead, direct
labor costs, labor related overhead and related depreciation of property, plant
and equipment. Appropriate reserves have been recorded for obsolete or slow
moving items.
Receivables and other assets are recorded at face value less write downs or
allowances. All known risks have been accounted for. In addition to the specific
allowance for bad debts a general allowance of 1% has been recorded on domestic
receivables in accordance with German tax regulations. Outside of Germany the
general allowance is recorded based on past experience.
Non interest bearing and low interest bearing receivables due after more than
one year are reported at present values.
Receivables denominated in foreign currencies are stated at the lower of the
rate in effect at the date the receivable was recorded or the rate in effect at
the balance sheet date.
The accruals for pension and similar obligations are stated using the values
derived from actuarial appraisals in accordance with Section 6 a German Income
Tax Law using a discount rate of 6%.
An accrued liability for taxes and other contingencies is recorded when an
obligation with third parties has been incurred, its utilization is probable and
the amount can be reasonably estimated.
Liabilities are recorded at face value. Liabilities in foreign currency are
stated at the rate in effect at the date the liability was recorded or at the
higher rate in effect at the balance sheet date.
11
FOREIGN CURRENCY TRANSLATION
Assets and liabilities reported by foreign subsidiaries have been translated
into Deutsche Marks using the exchange rate in effect at the balance sheet date.
Translation differences in the balance sheet between the years resulting from
translation at different exchange rates are recorded in capital reserves.
Revenues, expenses and net income/loss for the year have been translated into
Deutsche Marks using average exchange rates. The resulting translation
difference is recorded in capital reserves.
DISCLOSURES TO THE COMBINED BALANCE SHEET
FIXED ASSETS
See Exhibit 1 for details of the development of fixed assets in 1997.
The depreciation for the year includes extraordinary depreciation in the amount
of KDM 3,498.
Details of financial investments are given in Exhibit 2 and 3.
RECEIVABLES
Receivables from affiliated companies comprise trade receivables of KDM 9,218
and receivables from intercompany financing of KDM 17,003.
Trade receivables and receivables from affiliated companies include receivables
due from shareholders of KDM 16,549 and of KDM 4,200, respectively.
The receivables are due within one year except for an amount of KDM 7,000
included in other assets which is due in more than one year.
SUBSCRIBED CAPITAL
The subscribed capital only comprises the capital of TSG.
12
MINORITY INTERESTS
The minority interests of Daimler-Benz Group comprise subsidiaries of
Daimler-Benz Group that are industrially managed and include interests in
Dialogue Group and Siliconix Group.
Other minority interests include interests in Dialogue Group, Siliconix Group,
Matra MHS and Shanghai TEMIC Opto Semiconductors Company Limited, which are not
owned by any company of the Daimler-Benz Group.
ACCRUALS
Other Accruals mainly include provisions for sales deductions and bonuses,
royalties, warranty obligations, accrued losses on uncompleted contracts,
termination pay, commissions and vacation pay.
LIABILITIES
Breakdown of the individual liability positions according to their maturity:
Total Maturity
-------------- -------------------------------------------------
5 years
within 1 year 1 to 5 years and more
-------------- --------------- --------------- ---------------
1. Bank borrowings 163,769 61,580 100,981 1,208
2. Payments received on account
of orders 270 270 0 0
3. Trade payables 129,705 129,260 445 0
4. Liabilities on bills accepted and drawn 5,669 5,669 0 0
5. Payables to affiliated companies 208,626 208,204 422 0
thereof to shareholders 10,200 10,200
6. Payables to enterprises in which
participating interests are held 940 940 0 0
7. Other liabilities 95,576 88,801 1,189 5,586
thereof for taxes 5,226 5,226
thereof for social security 8,061 8,061
thereof to shareholders 987 987
-------------- --------------- --------------- ---------------
604,555 494,724 103,037 6,794
============== =============== =============== ===============
13
The payables to affiliated companies comprise trade accounts payable of KDM
14,380 and payables from intercompany financing of KDM 194,246.
Of the bank borrowings, an amount of KDM 3,232 is secured by a mortgage on real
estate. An amount of KDM 23,451 is secured through an assignment of assets.
OTHER FINANCIAL OBLIGATIONS
The other financial obligations from existing leasing and rent contracts amount
to KDM 188,187.
DISCLOSURES TO THE COMBINED PROFIT AND LOSS STATEMENT
SALES
(KDM) %
---------------- -----------------
CLASSIFICATION BY BUSINESS SEGMENT
IC Division 617,948 40.4 %
Discrete Division 913,017 59.6 %
----------------
1,530,965
================
CLASSIFICATION BY GEOGRAPHICAL AREA
Domestic (Germany) 272,355 17.8 %
European Community (excluding Germany) 441,892 28.9 %
Rest of Europe 18,192 1.2 %
United States of America 320,433 20.9 %
Africa 2,894 0.2 %
Japan 84,115 5.5 %
South-East Asia 350,686 22.9 %
Rest of the world 40,398 2.6 %
----------------
1,530,965
================
14
COST OF MATERIALS
(KDM)
-----------------
a) Cost of raw materials and supplies and of purchased
merchandise 349,023
b) Cost of purchased services 217,834
=================
566,857
=================
PERSONNEL EXPENSES
(KDM)
-----------------
a) Wages and salaries 387,389
b) Social security and other pension cost
thereof pension cost: KDM 17,124 107,188
=================
494,577
=================
INTEREST EXPENSES
This position subdivides as follows:
(KDM)
-----------------
Interest expenses (18,638)
thereof to affiliated companies: KDM 10,101
Interest income 3,551
thereof from affiliated companies: KDM 1,137
Income from other investments and long-term loans 257
=================
(14,830)
=================
EXTRAORDINARY INCOME
Disclosed as extraordinary income is a contribution by TEMIC GmbH to compensate
for the losses of the German semiconductor business from the period January 1,
1997 through September 30, 1997.
15
OTHER TAXES
Other taxes amount to KDM 11,288. Thereof KDM 8,896 are included in cost of
sales, mainly net assets tax (KDM 4,742) and property tax (KDM 2,558).
OTHER NOTES
EMPLOYEES
AVERAGE NUMBER OF EMPLOYEES DURING 1997
Waged Employees 4,354
Salaried Employees 2,613
Trainees 97
=================
7,064
=================
NUMBER OF EMPLOYEES AT BALANCE SHEET DATE
Waged Employees 4,311
Salaried Employees 2,735
Trainees 122
=================
7,168
=================
NOTES TO THE ORGANIZATION AND PARENT COMPANY (TSG)
The Management of TSG includes the following:
Dr. Michael Muhlbayer
Hans-Ulrich Staiger
The Supervisory Board of TSG includes the following:
Dr. Eckhard Cordes
Peter Conze
Cvetka Ivanovic
Dr. Wolfgang Scholz
Frank Dieter Maier
Dieter Schulze
Management remuneration paid by TSG amounted to KDM 91 in 1997. In the period
from January 1 to September 30, 1997, while TSG was a legal dependent part of
TEMIC Gmbh, there have been allocations for management remuneration amounting to
KDM 273.
Remuneration of the Supervisory Board of TSG for the period from September 18 to
December 31, 1997 amounted to KDM 40.
16
As at December 31, 1997 the pension accruals included KDM 2,105 for former
members of the management board. Pensions paid to former management amount to
KDM 166.
As at December 31, 1997 TSG was fully owned by TEMIC GmbH which in turn is
directly or indirectly majority owned by Daimler-Benz AG, Stuttgart. Dialouge
was majority owned by TEMIC GmbH, Siliconix was indirectly majority owned by
Daimler-Benz AG. TSG, TEMIC GmbH, Siliconix and Dialogue Group are included in
the consolidated financial statements of Daimler-Benz AG. These are published at
the commercial register of the municipal court in Stuttgart (HRB 15350).
17
2. RECONCILIATION TO U.S. GAAP
The accompanying combined financial statements have been prepared in conformity
with accounting principles generally accepted in Germany. Those principles
differ from accounting principles generally accepted in the United States of
America. Following are the significant differences relating to the Company's
combined financial statements:
a) Capital contribution
The amount disclosed as capital contribution equals the losses incurred by the
German TEMIC semiconductor division in the period January 1, through September
30, 1997. The net loss was assumed by the parent company. In the German GAAP
financial statements the loss assumed by the parent company is disclosed as
extraordinary income while under U.S. GAAP the contribution is disclosed as a
capital contribution.
b) Deferred taxes
The deferred tax asset in accordance with FAS 109 has been recognized on
temporary differences and on available tax loss carry forwards to the extent
that a future realization appears more likely than not. In the German GAAP
financial statements no material deferred tax asset was recognized.
c) Investments in Affiliated Companies
Under German GAAP certain investments in affiliated companies are stated at
cost. Under U.S. GAAP these investments are accounted for on the equity method.
d) Accrued losses on uncompleted contracts
The reserve comprises (for German purposes) the difference between cost
(including administration and selling overhead cost) and anticipated net sales
prices for accepted customer orders. For U.S. purposes selling and
administration as well as research and development overhead cost have been
eliminated in calculating the accrual.
18
e) Unrealized Exchange Gains
Under German GAAP receivables denominated in foreign currency are recorded at
the lower of the rate in effect at the date the receivable was recorded or the
rate in effect at the balance sheet date. Liabilities are recorded at the higher
of rate at the date the liability was recorded or the rate in effect at the
balance sheet date. Under U.S. GAAP the year end rate has to be used.
f) Pensions
The Company has various pension plans including a major pension scheme of TSG.
U.S. GAAP requires that future salary increases and cost of living increases be
included in the actuarial assumptions. This results in a higher accrual for U.S.
GAAP than according to German GAAP.
The pension liability in accordance with FAS 87 "Employers' Accounting For
Pensions" is as follows:
German GAAP U.S. GAAP
(KDM) (KDM)
-------------------------------------
Accrued pension cost 84,557 98,847
Net periodic pension expense 17,124 16,251
g) Inventories
The recorded GAAP difference on inventory represents the difference between the
reserve for lower of cost or market calculated in accordance with German GAAP
("verlustfreie Bewertung") and U.S. GAAP respectively. For the German reserve
the difference between cost and market was calculated by comparing the net sales
prices with the cost plus (direct and indirect) selling and administration cost.
In accordance with U.S. GAAP indirect selling and administration cost were not
considered in calculating the reserve.
19
h) Termination Pay Reserve
The difference relates to the termination pay reserve of the Austrian subsidiary
of TSG. Employees are entitled under Austrian labor legislation to such
termination payments either on their retirement or involuntary termination of
their employment. The termination pay entitlement commences after three years of
employment and increases in steps over the employee's period of service. The
provision for employees' termination pay entitlements for U.S. GAAP reporting
purposes includes the effect of future salary increases.
i) Net Income in Accordance with U.S. GAAP
1997
(KDM)
-----------------
German GAAP net income 15,529
Other minority interests other than Daimler-Benz
Group in net results of combined entities (421)
-----------------
German GAAP net income excluding other minority interests
other than Daimler-Benz Group in net results of combined entities 15,108
-----------------
Capital contribution (16,817)
Deferred taxes 10,985
Investments in affiliated companies 3,677
Accrued losses on uncompleted contracts 1,459
Unrealized exchange gains 1,193
Pension expense 873
Inventories 373
Termination pay reserve (131)
Other 109
-----------------
Net decrease of reported net income 1,721
-----------------
Other minority interests other than Daimler-Benz Group
in net decrease of reported net income
(873)
-----------------
Approximate net income in accordance with U.S. GAAP 15,956
=================
20
j) Reconciliation of German GAAP Equity to U.S. GAAP Equity
12-31-1997
(KDM)
-----------------
Equity as reported in the German GAAP combined balance sheet
480,326
Other minority interests other than Daimler-Benz Group
in equity of combined entities (66,600)
-----------------
German GAAP net equity excluding other minority interests
other than Daimler-Benz Group in equity of combined entities 413,726
-----------------
Deferred taxes 25,227
Investments in affiliated companies 342
Accrued losses on uncompleted contacts 4,878
Unrealized exchange gains 2,424
Pension reserve (14,290)
Inventories 692
Termination pay reserve (2,422)
Other 950
-----------------
Net decrease of reported net equity 17,801
-----------------
Other minority interests other than Daimler-Benz Group
in net decrease of reported net equity
(1,998)
-----------------
Approximate equity in accordance with U.S. GAAP 429,529
=================
Heilbronn, May 14, 1998
The Management
21
Statement of Movements of Fixed Assets TEMIC Semiconductor Business (German GAAP) Exhibit 1
- ------------------------------------------------------------------------------------------------------------------------------
(in DM 000) Acquisition and Production Costs
------------------------------------------------------------------------------
Balance on Currency Balance on
1//1/97 effect Additions Transfers Disposals 12/31/97
------------- -------------- ------------ ------------ -----------------------
Intangible assets
Concessions, industrial and similar
rigths and assets and licences and
licences in such rights and assets 43,196 303 11,103 0 4,420 50,182
Software 55,081 1,202 3,887 728 9,476 51,422
Goodwill 0 0 390 0 0 390
------------- -------------- ------------ ------------ -----------------------
98,277 1,505 15,380 728 13,896 101,994
............. .............. ............ ............ .......................
Tangible assets
Land, leasehold rights and buildings
including buildings on third party land 259,659 10,178 11,970 9,350 3,035 288,122
Technical equipment and machines 1,056,712 21,541 67,361 97,375 63,767 1,179,222
Other equipment, factory and
ofiice equipment 159,975 919 17,179 8,808 14,366 172,515
Payments on account and assets
under construction 52,380 1,261 105,927 (116,261) 1,028 42,279
------------- -------------- ------------ ------------ -----------------------
1,528,726 33,899 202,437 (728) 82,196 1,682,138
............. .............. ............ ............ .......................
Financial assets
Shares in affiliated companies 14,817 34 563 0 12,280 3,134
Loans to affiliated companies 2,203 18 394 0 1,898 717
Shares in associated companies 11,422 1,743 6,347 0 0 19,512
Securities 3,304 (17) 61 0 127 3,221
Other loans 130 0 314 0 151 293
------------- -------------- ------------ ------------ -----------------------
31,876 1,778 7,679 0 14,456 26,877
............. .............. ............ ............ .......................
1,658,879 37,182 225,496 0 110,548 1,811,009
============= ============== ============ ============ =======================
------------------------------------------
Accumulated Net
Depreciation book value
------------------------------------------
Depreciation
Balance on Balance on for
12/31/97 12/31/97 the year
- ------------- --------------------------
Intangible assets
Concessions, industrial and similar
rigths and assets and licences and
licences in such rights and assets 28,764 21,418 6,822
Software 38,378 13,044 7,320
Goodwill 78 312 78
- ------------- ------------- -----------
67,220 34,774 14,220
. ............. ..........................
Tangible assets
Land, leasehold rights and buildings
including buildings on third party land 154,887 133,235 11,860
Technical equipment and machines 831,753 347,469 103,137
Other equipment, factory and
ofiice equipment 130,277 42,238 21,981
Payments on account and assets
under construction 0 42,279 0
- ------------- --------------------------
1,116,917 565,221 136,978
. ............. ..........................
Financial assets
Shares in affiliated companies 2,189 945 692
Loans to affiliated companies 113 604 0
Shares in associated companies 0 19,512 0
Securities 0 3,221 0
Other loans 60 233 60
- ------------- --------------------------
2,362 24,515 752
. ............. ..........................
1,186,499 624,510 151,950
= ============= ==========================
22
NON CONSOLIDATED GROUP COMPANIES /1/ Exhibit 2
as of December 31, 1997
- ---------------------------------------------------------------------------------------------------------------------------------
COMPANY CITY COUNTRY SHAREHOLDER
- ---------------------------------------------------------------------------------------------------------------------------------
MATRA MHS GmbH ("MHSG") Eching Germany MHS, 100 %
TEMIC UK Limited ("TMUK") Bracknell Great Britain MHS, 100 %
TEMIC Nordic AB ("TMS") Sundyberg Sweden MHS, 100 %
MATRA MHS Inc. ("MHSUSA") Santa Clara USA MHS, 100 %
TEMIC Hong Kong Limited ("TMHK") Hong Kong China MHS, 100 %
TEMIC Korea Limited ("TMROK") Seoul Korea TMHK, 12,320 shares (approx. 80 %)
K.M. Park, 2,310 shares (approx. 15 %)
Henry Lee, 770 shares (approx. 5 %)
MATRA MHS Italia S.r.l. ("MHSI") Milano Italy MHS, 100 %
TEMIC Usha Limited ("TMIND") Gurgaon India MHS, 465,187 shares (approx. 50 %)
Usha Limited, 232,594 shares (approx. 25 %)
Asharfi Chit Fund & Finance PVT Limited
232,593 (approx. 25 %)
TEMIC France SNC ("TMF") Saint Quentin France MHS, capital contribution FF 90,000 (90 %)
en Yvelines TMUK, capit. contrib. FF 10,000 (10 %)
T. SQUARE Inc. ("TSQW") Santa Clara USA MHS, 2,223,000 shares of Series A
preferred stock (approx. 20.62 %)
21 Investors
Siliconix S.r.I. ("SILI") Milano Italy Siliconix Inc., 100 %
- ------------------------------------------------------------------------------------------
TOTAL PROFIT
COMPANY EQUITY (LOSS)
- ------------------------------------------------------------------------------------------
MATRA MHS GmbH ("MHSG") DM 234,489 4,191
TEMIC UK Limited ("TMUK") GBP 119,194 (21,895)
TEMIC Nordic AB ("TMS") SKR 1,421,788 262,023
MATRA MHS Inc. ("MHSUSA") US$ 0 0
TEMIC Hong Kong Limited ("TMHK") HK$ 1,625,300 125,298
TEMIC Korea Limited ("TMROK") US$ 156,063 (22,537)
MATRA MHS Italia S.r.l. ("MHSI") LIT /2/ 80,837,311 (25,317,634)
TEMIC Usha Limited ("TMIND") IR /2/ 28,181,348 17,761,435
TEMIC France SNC ("TMF") FF (3,002,487) (2,818,636)
T. SQUARE Inc. ("TSQW") US$ 6,844,465 (3,938,535)
Siliconix S.r.I. ("SILI") (currently without operations)
- ----------------
/1/ Included in the financial statements under German GAAP at cost
/2/ Figures as of 12-31-1996
23
Exhibit 3
PARTICIPATIONS CONSOLIDATED AT EQUITY
as of December 31, 1997
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL PROFIT /
Company City Country Shareholder EQUITY (LOSS)
- -------------------------------------------------------------------------------------------------------------------------------
Shanghai SIMCONIX Electronic Ltd. Shanghai China Siliconix Inc. 50% US$ 21, 776,000 7,084,000
Shanghai Institute of Metal 50%
24
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
VISHAY INTERTECHNOLOGY, INC.
AND
TEMIC SEMICONDUCTOR BUSINESS
(UNAUDITED)
The following pro forma condensed consolidated balance sheet (unaudited) as of
December 31, 1997 and pro forma condensed consolidated statement of operations
(unaudited) for the year ended December 31, 1997 give pro forma effect to the
purchase by Vishay of 80.4% of the capital stock of Siliconix Incorporated and
all of the capital stock of TEMIC Semiconductor GmbH from Daimler-Benz for total
consideration of approximately $500,000,000 in cash and the sale of the TEMIC
Integrated Circuits Division to Atmel for approximately $110,000,000. The pro
forma condensed consolidated statement of operations for the year ended December
31, 1997 presents the results of operations of Vishay as if the above mentioned
transactions (collectively,"the acquisition") were consummated as of January 1,
1997. The pro forma consolidated balance sheet (unaudited) as of December 31,
1997 presents the financial position of Vishay as if the acquisition had
occurred as of December 31, 1997. The pro forma information is based on the
historical financial statements of Vishay and the TEMIC Semiconductor Business,
giving effect to the acquisition under the purchase method of accounting and the
assumptions and adjustments set forth in the accompanying notes.
These pro forma condensed consolidated financial statements have been prepared
by Vishay's management based upon the audited combined financial statements of
the TEMIC Semiconductor Business as of and for the year ended December 31, 1997.
These pro forma financial statements may not be indicative of the results that
actually would have occurred had the acquisition occurred on the dates indicated
or those that may be obtained in the future. The pro forma financial statements
should be read in conjunction with the consolidated financial statements of
Vishay included in Vishay's Annual Report on Form 10-K for the year ended
December 31, 1997, and the consolidated financial statements of the TEMIC
Semiconductor Business for the year ended December 31, 1997 included in this
Form 8-K/A.
25
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Certain financial information has been derived from the combined audited
financial statements and notes thereto of TEMIC Semiconductor GmbH for the year
ended December 31, 1997.
(A) Amounts for TEMIC have been translated from Deutsche Marks to U.S. Dollars
as follows:
Balance Sheet Data - at the approximate exchange rate in effect as of
December 31, 1997 ($1 = DM 1.7885)
Income Statement Data - at the approximate average exchange rate in
effect during the year ended December 31, 1997
($1 = DM 1.7331)
(B) Reflects increase in outstanding indebtedness as a result of the purchase by
Vishay of 80.4% of the issued and outstanding shares of Siliconix Incorporated
and all of the capital stock of TEMIC Semiconductor GmbH from Daimler Benz for
total consideration of approximately $500,000 and the sale of the TEMIC
Integrated Circuits Division to Atmel for approximately $110,000. The purchase
price and related costs were financed through long-term debt.
Purchase price, net............................... 389,936
Professional fees and other costs................. 664
--------
Total purchase price $390,600
=========
The Company also paid $3,400 of bank costs associated with the credit facility
used to finance the acquisition.
(C) Under purchase accounting, the total purchase price is allocated to assets
acquired and liabilities assumed based on their estimated fair values. Purchase
accounting adjustments have been preliminarily estimated by Vishay's management
based upon currently available information. There can be no assurance, however,
that the estimated adjustments represent the final purchase accounting
adjustments that will ultimately be determined. Management is waiting for the
results of appraisals and other information that will be required to determine
the final purchase allocation. The following pro forma adjustments have been
made to reflect the estimated fair values of the acquired assets and liabilities
as of December 31, 1997.
Net Assets
Increase (Decrease)
Property and equipment ................................. 48,942
Estimated TEMIC restructuring costs .................... (38,551)
Deferred income taxes
Other current assets ................................ 17,931
Other non-current liabilities ....................... (14,553)
Elimination of TEMIC goodwill .......................... (174)
Elimination of TEMIC Stockholders' Equity .............. (139,546)
Minority Interest ...................................... (1,713)
TEMIC debt to Daimler-Benz not assumed by Vishay .......
Short-term .................................... 118,642
Long-term ..................................... 13,012
Cost in excess of net assets acquired .................. 107,518
26
(D) For purposes of determining the pro forma effect of the TEMIC acquisition on
the Vishay consolidated statement of operations, the following estimated pro
forma adjustments have been made:
INCREASE (DECREASE) INCOME
YEAR ENDED
12/31/97
1. Interest expense on
additional variable rate
long-term debt of
$390,000 at a 6.30%
assumed interest rate....... $(24,570)
2. Interest expense reduction due
to refinancing of TEMIC
debt by Vishay.............. 3,994
3. Increase in depreciation
resulting from adjustments to
fair value of property, plant
and equipment and the
establishment by Vishay of
estimated remaining useful lives........ (5,757)
4. Amortization of cost in excess of net assets
acquired(goodwill) over a forty-year period..... (2,688)
5. Amortization of deferred bank costs
over a five-year period...................... (680)
6. Income tax benefit applicable
to adjustments at a 38%
assumed rate................ 11,286
---------
$ (18,415)
(E) Pro forma earnings per share for the year ended December 31, 1997 was
computed as follows:
Weighted average number of common
shares outstanding 64,459
Pro forma net earnings.......... $66,110
=======
Pro forma net earnings per share $ 1.03
=======
(F) Long-term bank borrowings relating to the acquisition are at variable rates.
An increase or decrease of 1/2% in the interest rate on such borrowings would
decrease or increase pro forma net earnings and earnings per share by
approximately $1,209 and $0.02, respectively.
27
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
DECEMBER 31, 1997
AS REPORTED DECEMBER 31,
---------------------------- DIALOGUE - SALE PRO FORMA 1997
VISHAY TEMIC NOT ACQUIRED TO ATMEL ADJUSTMENTS PRO FORMA
---------------------------- ------------- --------------- ----------- ------------
(IN THOUSANDS)
ASSETS
Cash and cash equivalents $55,263 $18,753 $1,208 $6,705 ($3,400) (B) $62,703
Accounts receivable 186,687 161,324 9,221 73,484 265,307
Inventories 339,371 153,634 2,720 42,263 448,022
Other current assets 64,650 53,002 953 13,202 17,931 (C) 121,428
----------- --------- ------------ ------------- -------------- ----------
Total Current Assets 645,971 386,713 14,102 135,653 14,531 897,460
Property and equipment 709,142 316,031 2,594 98,612 48,942 (C) 972,908
Goodwill 286,923 174 107,518 (C) 394,441
(174) (C)
Other assets 77,612 47,272 1,393 30,589 3,400 (B) 96,302
----------- --------- ------------ ------------- -------------- -----------
$1,719,648 $750,191 $18,089 $264,855 $174,217 $2,361,111
=========== ========= ============ ============= ============== -==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts and notes payable $77,851 $82,991 $4,588 $40,008 $0 $116,246
Other current liabilities 108,527 59,389 2,394 44,506 38,551 (C) 159,567
Short term borrowings 0 143,972 5,921 19,409 (118,642) (C) (0)
Current portion of long-term debt 4,459 0 0 0 4,459
----------- --------- ------------ ------------- -------------- -----------
Total Current Liabilities 190,837 286,352 12,902 103,923 (80,091) 280,272
Long-term debt 347,463 57,373 0 44,361 (13,012) (C) 738,063
390,600 (B)
Deferred income 59,300 0 0 0 59,300
Other non-current liabilities 144,470 127,950 7 21,135 14,553 (C) 265,830
Minority Interest 17,930 38,355 0 0 1,713 (C) 57,998
Stockholders' equity
Common stock 5,646 0 0 0 5,646
Other stockholders' equity 954,002 240,162 5,180 95,436 (139,546) (C) 954,002
----------- --------- ------------ ------------- -------------- ----------
$1,719,648 $750,191 $18,089 $264,855 $174,217 $2,361,111
=========== ========= ============== ================ ================= ===========
See notes to pro forma condensed consolidated financial statements.
28
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1997 YEAR ENDED
AS REPORTED PRO FORMA DECEMBER 31,
---------------------- DIALOGUE - SALE ADJUSTMENTS 1997
VISHAY TEMIC NOT ACQUIRED TO ATMEL - NOTE D PRO FORMA
---------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales $1,125,219 $883,368 $43,565 $278,954 $1,686,068
Costs of products sold 858,020 657,287 33,424 208,828 $5,757 1,278,812
----------- --------- -------- --------- ----------- -----------
Gross profit 267,199 226,081 10,140 70,127 (5,757) 407,256
Selling, general, and
administrative expenses 136,876 217,522 7,574 91,051 680 256,454
Amortization of goodwill 7,218 2,688 9,906
Unusual items 14,503 14,503
----------- --------- -------- --------- ----------- -----------
Operating income 108,602 8,559 2,566 (20,924) (9,125) 126,393
Other income (expense):
Interest expense (18,819) (8,557) (247) (4,316) (20,576) (43,389)
Other (2,314) 9,456 55 88 6,999
----------- --------- -------- --------- ----------- -----------
(21,133) 899 (192) (4,228) (20,576) (36,390)
----------- --------- -------- --------- ----------- -----------
Earnings before income taxes 87,469 9,458 2,374 (25,151) (29,701) 90,003
Income taxes 34,167 251 (1,357) 596 (11,286) 23,893
----------- --------- -------- --------- ----------- -----------
Net earnings $53,302 $9,207 $3,731 ($25,748) ($18,415) $66,110
=========== ========= ======== ========= =========== ===========
Basic and diluted earnings per share $0.83 $1.03
Weighted average shares
outstanding - assuming dilution 64,459 64,459
See notes to pro forma condensed consolidated financial statements.
29
EXHIBIT INDEX
Exhibit
No. Description Page No.
23 Consent of Independent Accountants
30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Current Report on Form 8-K to
be signed on its behalf by the undersigned thereunto duly authorized.
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
----------------------
Name: Richard N. Grubb
Title: Executive Vice President,
Treasurer and Chief Financial
Officer
Date: May 15, 1998
31
Consent of Independent Accountants
To the shareholders of the
TEMIC Semiconductor Business
We consent to the incorporation by reference in the following registration
statements (No. 33-7850, 33-7851 and 33-59609) on Form S-8 of Vishay
Intertechnology, Inc. of our report dated May 14, 1998, with respect to the
combined balance sheet of the TEMIC Semiconductor Business as of December 31,
1997, and the related combined statements of revenues and expenses and cash
flow, included in Vishay Intertechnology Inc.'s Form 8-K filed with the
Securities Exchange Commission.
KPMG Deutsche Treuhand-Gesellschaft AG
Stuttgart, Germany
May 14, 1998