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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to ___________
COMMISSION FILE NUMBER 1-7416
VISHAY INTERTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 38-1686453
- --------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
63 LINCOLN HIGHWAY
MALVERN, PENNSYLVANIA 19355-2120
- --------------------------------------- --------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (610) 644-1300
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------------
COMMON STOCK, $.10 PAR VALUE NEW YORK STOCK EXCHANGE
---------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act: NONE
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Common Stock held by non-affiliates of
the registrant as of March 18, 1996, assuming conversion of all its Class B
Common Stock into Common Stock of the registrant held by non-affiliates, was
$1,351,983,000.
As of March 18, 1996, registrant had 51,143,111 shares of its Common Stock
and 7,222,035 shares of its Class B Common Stock outstanding.
Portions of the registrant's definitive proxy statement, which will be
filed within 120 days of December 31, 1995, are incorporated by reference into
Part III.
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Vishay Intertechnology, Inc. (together with its consolidated subsidiaries,
"Vishay" or the "Company") is a leading international manufacturer and supplier
of passive electronic components, particularly resistors, capacitors and
inductors, offering its customers "one-stop" access to one of the most
comprehensive passive electronic component lines of any manufacturer in the
United States or Europe. Passive electronic components, together with
semiconductors (integrated circuits), which the Company does not produce, are
the primary elements of every electronic circuit. The Company manufactures one
of the broadest lines of surface mount devices, a fast growing format for
passive electronic components that is being increasingly demanded by customers.
In addition, the Company continues to produce components in the traditional
leaded form. Components manufactured by the Company are used in virtually all
types of electronic products, including those in the computer,
telecommunications, military/aerospace, instrument, automotive, medical and
consumer electronics industries.
Since early 1985, the Company has pursued a business strategy that
principally consists of the following elements: (i) expansion within the passive
electronic components industry, primarily through the acquisition of other
manufacturers with established positions in major markets, reputations for
product quality and reliability and product lines with which the Company has
substantial marketing and technical expertise; (ii) reduction of selling,
general and administrative expenses through the integration or elimination of
redundant sales offices and administrative functions at acquired companies;
(iii) achievement of significant production cost savings through the transfer
and expansion of manufacturing operations to regions, such as Israel, Mexico,
Portugal and the Czech Republic, where the Company can take advantage of lower
labor costs and available tax and other government-sponsored incentives; and
(iv) maintaining significant production facilities in those regions where the
Company markets the bulk of its products in order to enhance customer service
and responsiveness.
As a result of this strategy, the Company has grown during the past ten
years from a small manufacturer of precision resistors and strain gages to one
of the world's largest manufacturers and suppliers of a broad line of passive
electronic components. During this period, its revenues have increased from $57
million for fiscal year 1985 to $1.2 billion for the year ended December 31,
1995, while net profits have increased from $7.9 million to $92.7 million.
The Company's major acquisitions have included Dale Electronics, Inc.
(United States, Mexico and the United Kingdom) in 1985, Draloric Electronic GmbH
(Germany and the United Kingdom) in 1987, Sfernice S.A. (France) in 1988,
Sprague Electric Company ("Sprague") (United States and France) in 1992,
Roederstein GmbH ("Roederstein") (Germany, Portugal and the United States) in
1993, and Vitramon, Incorporated ("Vitramon") (United States, France, Germany
and the United Kingdom) in 1994. In January 1995, the Company acquired a 49%
equity interest in Nikkohm Co., Ltd., a Japanese manufacturer of thin film
resistors and resistor networks. Nikkohm had sales of approximately $5 million
in 1995. This acquisition is intended to facilitate the Company's access to the
Japanese electronics market.
The Company currently operates as three separate business units: (i) Vishay
Electronic Components, North America and Asia, which is comprised of Dale, a
manufacturer and supplier of resistors, the Vishay Resistive Systems Unit, which
primarily manufactures high performance foil resistors and thin film resistor
networks; Sprague, which primarily manufactures tantalum capacitors; and the
U.S. operations of Vitramon, which manufacture multi-layer ceramic chip (MLCC)
capacitors; (ii) Vishay Electronic Components, Europe, which is comprised of
Draloric/Roederstein, German-based manufacturers and suppliers of resistors and
capacitors in Europe, which includes the German operations of Vitramon; Vishay,
S.A., a resistor producer in France, which includes the French operations of
Vitramon; and Vishay Components (UK), a manufacturer and supplier of the
Company's products in the United Kingdom, which includes the U.K. operations of
Vitramon; and (iii) Measurements Group, Inc., which produces resistive sensors
and other stress measuring devices in the United States.
Vishay was incorporated in Delaware in 1962 and maintains its principal
executive offices at 63 Lincoln Highway, Malvern, Pennsylvania 19355-2120. The
telephone number is (610) 644-1300.
PRODUCTS
Vishay designs, manufactures and markets electronic components that cover a
wide range of products and technologies. The products primarily consist of fixed
resistors, tantalum, multi- layer ceramic chip ("MLCC") and film capacitors,
and, to a lesser extent, inductors, aluminum and specialty ceramic capacitors,
transformers, potentiometers, plasma displays and thermistors. The Company
offers most of its product types in the increasingly demanded surface mount
device form and in the traditional leaded device form. The Company believes it
produces one of the broadest lines of passive electronic components available
from any single manufacturer.
Resistors are basic components used in all forms of electronic circuitry to
adjust and regulate levels of voltage and
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current. They vary widely in precision and cost, and are manufactured in
numerous materials and forms. Resistive components may be either fixed or
variable, the distinction being whether the resistance is adjustable (variable)
or not (fixed). Resistors can also be used as measuring devices, such as
Vishay's resistive sensors. Resistive sensors or strain gages are used in
experimental stress analysis systems as well as in transducers for electronic
measurement loads (scales), acceleration and fluid pressure.
Vishay manufactures virtually all types of fixed resistors, both in
discrete and network forms. These resistors are produced for virtually every
segment of the resistive product market, from resistors used in the highest
quality precision instruments for which the performance of the resistors is the
most important requirement, to resistors for which price is the most important
factor.
Capacitors perform energy storage, frequency control, timing and filtering
functions in most types of electronic equipment. The more important applications
for capacitors are (i) electronic filtering for linear and switching power
supplies, (ii) decoupling and bypass of electronic signals or integrated
circuits and circuit boards, and (iii) frequency control, timing and
conditioning of electronic signals for a broad range of applications. The
Company's capacitor products primarily consist of solid tantalum surface mount
chip capacitors, solid tantalum leaded capacitors, wet/foil tantalum capacitors,
MLCC capacitors, and film capacitors. Each capacitor product has unique physical
and electrical performance characteristics that make each type of capacitor
useful for specific applications. Tantalum and MLCC capacitors are generally
used in conjunction with integrated circuits in applications requiring low to
medium capacitance values ("capacitance" being the measure of the capacitor's
ability to store energy). The tantalum capacitor is the smallest and most stable
type of capacitor for its range of capacitance and is best suited for
applications requiring medium capacitance values. MLCC capacitors, on the other
hand, are more cost-effective for applications requiring lower capacitance
values. The Company's MLCC capacitors are known for their particularly high
reliability. Management believes that surface mounted MLCC chip capacitors,
tantalum chip capacitors, and thick film resistor chips represent the fastest
growing segments of the passive electronic component industry.
The Company believes it has taken advantage of the growth of the surface
mount component market and is an industry leader in designing and marketing
surface mount devices. The Company also believes that in the United States and
Europe it is a market leader in the development and production of a wide range
of these devices, including thick film chip resistors, thick film resistor
networks and arrays, metal film leadless resistors (MELFs), molded tantalum chip
capacitors, coated tantalum chip capacitors, film capacitors,
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multi-layer ceramic chip capacitors, thin film chip resistors, thin film
networks, wirewound chip resistors, power strip resistors, bulk metal foil chip
resistors, current sensing chips, chip inductors, chip transformers, chip
trimmers and NTC chip thermistors. The Company also provides a number of
component packaging styles to facilitate automated product assembly by its
customers. The Company's position in the surface mount market has been enhanced
by the acquisition of Vitramon, since substantially all of Vitramon MLCC
products utilize surface mount technology. Surface mount devices adhere to the
surface of a circuit board rather than being secured by leads that pass through
holes to the back side of the board. Surface mounting provides distinct
advantages over through-hole mounting. For example, surface mounting allows the
placement of more components on a circuit board, which is particularly desirable
for a growing number of manufacturers who require greater miniaturization in
products such as hand held computers and cellular telephones. Surface mounting
also facilitates automation, resulting in lower production costs for equipment
manufacturers than those associated with leaded devices.
MARKETS
The Company's products are sold primarily to original equipment
manufacturers ("OEMs"), OEM subcontractors that assemble printed circuit boards
and independent distributors that maintain large inventories of electronic
components for resale to OEMs. Its products are used in, among other things,
virtually every type of product containing electronic circuitry, including
computer-related products, telecommunications, measuring instruments, industrial
equipment, automotive applications, process control systems, military and
aerospace applications, consumer electronics, medical instruments and scales.
For the year ended December 31, 1995, 39% of the Company's net sales was
attributable to customers in the United States, while the remainder was
attributable to sales primarily in Europe.
In the United States, products are marketed through independent
manufacturers' representatives, who are compensated solely on a commission
basis, by the Company's own sales personnel and by independent distributors. The
Company has regional sales personnel in several North American locations to
provide technical and sales support for independent manufacturers'
representatives throughout the United States, Mexico and Canada. In addition,
the Company uses independent distributors to resell its products. Outside North
America, products are sold to customers in Germany, the United Kingdom, France,
Israel, Japan, Singapore, South Korea, Brazil and other European and Pacific Rim
countries through Company sales offices, independent manufacturers'
representatives and distributors. In order to better serve its customers, the
Company
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maintains production facilities in those regions where it markets the bulk of
its products, such as the U.S., Germany, France and the U.K. In addition, to
maximize production efficiencies, the Company seeks whenever practicable to
establish manufacturing facilities in those regions, such as Israel, Mexico,
Portugal and the Czech Republic, where it can take advantage of lower labor
costs and available tax and other government-sponsored incentives.
The Company undertakes to have its products incorporated into the design of
electronic equipment at the research and prototype stages. Vishay employs its
own staff of application and field engineers who work with its customers,
independent manufacturers' representatives and distributors to solve technical
problems and develop products to meet specific needs.
The Company has qualified certain products under various military
specifications, approved and monitored by the United States Defense Electronic
Supply Center ("DESC"), and under certain European military specifications.
Classification levels have been established by DESC based upon the rate of
failure of products to meet specifications (the "Classification Level"). In
order to maintain the Classification Level of a product, tests must be
continuously performed, and the results of these tests must be reported to DESC.
If the product fails to meet the requirements for the applicable Classification
Level, the product's classification may be reduced to a less stringent level.
Various United States manufacturing facilities from time to time experience a
product Classification Level modification. During the time that such level is
reduced for any specific product, net sales and earnings derived from such
product may be adversely affected.
The Company is undertaking to have the quality systems at most of its major
manufacturing facilities approved under the ISO 9000 international quality
control standard. ISO 9000 is a comprehensive set of quality program standards
developed by the International Standards Organization. Several of the Company's
manufacturing operations have already received ISO 9000 approval and others are
actively pursuing such approval.
Vishay's largest customers vary from year to year, and no customer has
long-term commitments to purchase products of the Company. No customer accounted
for more than 10% of the Company's sales for the year ended December 31, 1995.
RESEARCH AND DEVELOPMENT
Many of the Company's products and manufacturing processes have been
invented, designed and developed by Company engineers and scientists. The
Company maintains strategically located design centers where proximity to
customers enables it to more easily satisfy the needs of the local market. These
design centers are located in the United States (Connecticut, Maine,
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Nebraska, North Carolina, Pennsylvania), in Germany (Selb, Landshut, Pfafenberg,
Backnang), in France (Nice, Tours, Evry) and Israel. The Company also maintains
separate research and development staffs and promotes separate programs at a
number of its production facilities to develop new products and new applications
of existing products, and to improve product and manufacturing techniques. This
decentralized system encourages individual product development at individual
manufacturing facilities that occasionally have applications at other
facilities. Company research and development costs were approximately $10.4
million for 1995, $7.2 million for 1994 and $7.1 million for 1993. These amounts
do not include substantial expenditures for product development and the design,
development and manufacturing of machinery and equipment for new processes and
for cost reduction measures. See "Competition".
SOURCES OF SUPPLIES
Although most materials incorporated in the Company's products are
available from a number of sources, certain materials (particularly tantalum and
palladium) are available only from a relatively limited number of suppliers.
Tantalum, a metal, is the principal material used in the manufacture of
tantalum capacitor products. It is purchased in powder form primarily under
annual contracts with domestic suppliers at prices that are subject to periodic
adjustment. The Company is a major consumer of the world's annual tantalum
production. There are currently three major suppliers that process tantalum ore
into capacitor grade tantalum powder. Although the Company believes that there
is currently a surplus of tantalum ore reserves and a sufficient number of
tantalum processors relative to foreseeable demand, and that the tantalum
required by the Company has generally been available in sufficient quantities to
meet requirements, the limited number of tantalum powder suppliers could lead to
increases in tantalum prices that the Company may not be able to pass on to its
customers.
Palladium is primarily purchased on the spot and forward markets, depending
on market conditions. Palladium is considered a commodity and is subject to
price volatility. The price of palladium has fluctuated in the range of
approximately $104 to $130 per troy ounce during the last three years. Although
palladium is currently found in South Africa and Russia, the Company believes
that there are a sufficient number of domestic and foreign suppliers from which
the Company can purchase palladium. However, an inability on the part of the
Company to pass on increases in palladium costs to its customers could have an
adverse effect on the margins of those products using the metal.
-6-
INVENTORY AND BACKLOG
Although Vishay manufactures standardized products, a substantial portion
of its products are produced to meet customer specifications. The Company does,
however, maintain an inventory of resistors and other components. Backlog of
outstanding orders for the Company's products was $339.2 million, $305.7 million
and $198.4 million, respectively, at December 31, 1995, 1994 and 1993. The
increase in backlog at December 31, 1994 as compared with 1993 is attributable
in large part to the acquisition of Vitramon. The increase in backlog at
December 31, 1995 reflects an increase in demand for the Company's surface
mounted components, particularly MLCC capacitors, tantalum capacitors and thick
film resistor chips. Such demand was particularly strong during the first half
of 1995. Since the last fiscal quarter of 1995, and continuing into the first
quarter of 1996, the Company has experienced an overall slowdown in demand for
its products. The Company believes this may be primarily a result of the
unusually large build up of Vishay components in its customers' inventories
during the first half of 1995.
The Company, however, still continues to experience capacity constraints in
some of the above-mentioned products. The Company anticipates that the increase
in its plant manufacturing space in Israel over the next 12 months will
alleviate these constraints. In any event, the current backlog is expected to be
filled during the next twelve months. Most of the orders in the Company's
backlog may be cancelled by its customers, in whole or in part, although
sometimes subject to penalty. To date, however, cancellations have not been
significant.
COMPETITION
The Company faces strong competition in its various product lines from both
domestic and foreign manufacturers that produce products using technologies
similar to those of the Company. The Company's main competitors for tantalum
capacitors are KEMET, AVX and NEC; for MLCC capacitors, competitors are KEMET,
AVX, Murata and TDK. For thick film chip resistors, competitors are ROHM, Koa
and Yageo. For wirewound and metal film resistors, competitors are IRC, ROHM and
Ohmite.
The Company's competitive position depends on its product quality,
know-how, proprietary data, marketing and service capabilities and business
reputation, as well as on price. In respect of certain of its products, the
Company competes on the basis of its marketing and distribution network, which
provides a high level of customer service. For example, the Company works
closely with its customers to have its components incorporated into their
electronic equipment at the early stages of design and production and maintains
redundant production sites for most of its products to ensure an uninterrupted
supply of products. Further,
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the Company has established a National Accounts Management Program, which
provides the Company's largest customers with one national account executive who
can cut across Vishay business unit lines for sales, marketing and contract
coordination. In addition, the breadth of the Company's product offerings
enables the Company to strengthen its market position by providing its customers
with "one-stop" access to one of the broadest selections of passive electronic
components available from a direct manufacturing source.
A number of the Company's customers are contractors or subcontractors on
various United States and foreign government contracts. Under certain United
States Government contracts, retroactive adjustments can be made to contract
prices affecting the profit margin on such contracts. The Company believes that
its profits are not excessive and, accordingly, no provision has been made for
any such adjustment.
Although the Company has numerous United States and foreign patents
covering certain of its products and manufacturing processes, no particular
patent is considered material to the business of the Company.
MANUFACTURING OPERATIONS
The Company strives to balance the location of its manufacturing
facilities. In order to better serve its customers, the Company maintains
production facilities in those regions where it markets the bulk of its
products, such as the United States, Germany, France and the United Kingdom. To
maximize production efficiencies, the Company seeks whenever practicable to
establish manufacturing facilities in countries, such as Israel, Mexico,
Portugal and the Czech Republic, where it can take advantage of lower labor and
tax costs and, in the case of Israel, to take advantage of various government
incentives, including grants and tax relief.
At December 31, 1995, approximately 40% of the Company's identifiable
assets were located in the United States, approximately 42% were located in
Europe, approximately 17% were located in Israel and approximately 1% in other
regions. In the United States, the Company's main manufacturing facilities are
located in Nebraska, South Dakota, North Carolina, Pennsylvania, Maine,
Connecticut, Virginia, New Hampshire and Florida. In Europe, the Company's main
manufacturing facilities are located in Selb, Landshut and Backnang, Germany and
Nice and Tours, France. In Israel, manufacturing facilities are located in
Holon, Dimona and rented facilities in Migdal Ha-emek. The Company also
maintains major manufacturing facilities in Juarez, Mexico; Toronto, Canada;
Porto, Portugal; and the Czech Republic. Recently, the Company has invested
substantial resources to increase capacity and to maximize automation in its
plants, which it believes will further reduce production costs.
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To address the increasing demand for its products and in order to lower its
costs, the Company has expanded, and plans to continue to expand, its
manufacturing operations in Israel, where it benefits from the government's
employment and tax incentive programs designed to increase employment, lower
wage rates and a highly-skilled labor force, all of which have contributed
substantially to the growth and profitability of the Company.
Under the terms of the Israeli government's incentive programs, once a
project is approved, the recipient is eligible to receive the benefits of the
related grants for the life of the project, so long as the recipient continues
to meet preset eligibility standards. None of the Company's approved projects
has ever been cancelled or modified and the Company has already received
approval for a majority of the projects contemplated by its capital expenditure
program. However, from time to time, the government has considered scaling back
or discontinuing these programs. Accordingly, there can be no assurance that the
Israeli government will continue to offer new incentive programs or that, if it
does, the Company will continue to be eligible to take advantage of them. The
Company might be materially adversely affected if these incentive programs were
no longer available to the Company for new projects. In addition, the Company
might be materially adversely affected if hostilities were to occur in the
Middle East that interfere with the Company's operations in Israel. The Company,
however, has never experienced any material interruption in its Israeli
operations in its 26 years of production there, in spite of several Middle East
crises, including wars. For the year ended December 31, 1995, sales of products
manufactured in Israel accounted for approximately 17% of the Company's net
sales.
Due to a shift in manufacturing emphasis to higher automation and the
relocation of some production to regions with lower labor costs, portions of the
Company's work force and certain facilities may not be fully utilized in the
future. As a result, the Company may incur significant costs in connection with
work force reductions and the closing of additional manufacturing facilities.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
ENVIRONMENT
The Company's manufacturing operations are subject to various federal,
state and local laws restricting discharge of materials into the environment.
The Company is not involved in any pending or threatened proceedings which would
require curtailment of its operations. However, the Company is involved in
various legal actions concerning state government enforcement proceedings and
various dump site cleanups. These actions may result in fines and/or cleanup
expenses. The Company believes that any fine or cleanup expense, if imposed,
would not be material. The Company continually expends funds to ensure that its
facilities comply with
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applicable environmental regulations. The Company has nearly completed its
undertaking to comply with new environmental regulations relating to the
elimination of chlorofluorocarbons (CFCs) and ozone depleting substances (ODS)
and other anticipated compliances with the Clean Air Act amendments of 1990. The
Company anticipates that it will undertake capital expenditures of approximately
$4,000,000 in fiscal 1996 for general environmental compliance and enhancement
programs. The Company has been named a Potentially Responsible Party (PRP) at
seven Superfund sites. The Company has settled three of these for minimal
amounts and does not expect the others to be material. While the Company
believes that it is in material compliance with applicable environmental laws,
it cannot accurately predict future developments or have knowledge of past
occurrences on sites currently occupied by the Company. Moreover, the risk of
environmental liability and remediation costs is inherent in the nature of the
Company's business and, therefore, there can be no assurance that material
environmental costs, including remediation costs will not arise in the future.
With each acquisition, the Company undertakes to identify potential
environmental concerns and to minimize the environmental matters it may be
required to address. In addition, the Company establishes reserves for
specifically identified potential environmental liabilities. The Company
believes that the reserves it has established are adequate. Nevertheless, the
Company often unavoidably inherits certain pre-existing environmental
liabilities, generally based on successor liability doctrines. Although the
Company has never been involved in any environmental matter that has had a
material adverse impact on its overall operations, there can be no assurance
that in connection with any past or future acquisition the Company will not be
obligated to address environmental matters that could have a material adverse
impact on its operations.
EMPLOYEES
As of December 31, 1995, the Company employed approximately 17,900 full
time employees of whom approximately 11,000 were located outside the United
States. The Company hires few employees on a part time basis. While various of
the Company's foreign employees are members of trade unions, a de minimus number
of the Company's employees located in the United States is represented by
unions. The Company believes that its relationship with its employees is
excellent. However, no assurance can be given that if the Company continues to
restructure its operations in response to changing economic conditions that
labor unrest or strikes (especially at European facilities) will not occur.
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ITEM 2. PROPERTIES
The Company maintains approximately 54 manufacturing facilities. The
principal locations of such facilities, along with available space including
administrative offices, are:
Approx. Available
Owned Locations Space (Square Feet)
- --------------- -------------------
United States
-------------
Columbus and Norfolk, NE* 336,000
Malvern and Bradford, PA* 215,000
Sanford, ME 225,000
Wendell and Statesville, NC* 193,000
Concord, NH 120,000
Roanoke, VA 120,000
Monroe, CT 91,000
- ----------------
* two locations
Foreign
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Germany (10 locations) 954,000
France (7 locations) 560,000
Israel (2 locations) 430,000
Portugal 299,000
Vishay owns an additional 272,000 square feet of manufacturing facilities
located in Colorado, Maryland, New York, South Dakota and Florida.
Available leased facilities in the United States include 190,000 square
feet of space located in California, New Jersey, South Dakota and Massachusetts.
Foreign leased facilities consist of 121,000 square feet in Mexico, 188,000
square feet in France, 127,000 square feet in England, 37,000 square feet in
Canada and 202,000 square feet in Germany. The Company also has facilities in
Japan, Brazil, Israel and the Czech Republic.
To alleviate current capacity restraints, however, the Company expects to
complete construction of a 250,000 square foot plant in Migdal Ha-emek, Israel
and a 270,000 square foot facility in Beersheba, Israel in 1996.
ITEM 3. LEGAL PROCEEDINGS
The Company from time to time is involved in routine litigation incidental
to its business. Management believes that such matters, either individually or
in the aggregate, should not have a material adverse effect on the Company's
business or financial condition.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year covered by this report, no
matter was submitted to a vote of security holders of the Company.
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ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information regarding the executive
officers of the Company as of March 18, 1996.
Name Age Positions Held
- ---- --- --------------
Felix Zandman* 67 Chairman of the Board,
President, Chief
Executive Officer
and Director
Richard N. Grubb* 49 Vice President, Treasurer,
Chief Financial Officer
and Director
Robert A. Freece* 55 Senior Vice President
and Director
Abraham Inbar 67 Vice President;
President -- Vishay
Israel Ltd., a
subsidiary of Vishay
Henry V. Landau 49 Vice President; President
-- Measurements Group,
Inc., a subsidiary of
Vishay
William J. Spires 54 Vice President and
Secretary
Donald G. Alfson 50 Vice President; President -
- Vishay Electronic
Components, North
America and Asia,
President -- Dale
Electronics, Inc., and
Director
Gerald Paul 47 Vice President; President -
- Vishay Electronic
Components, Europe,
Managing Director --
Draloric Electronic
GmbH, and Director
* Member of the Executive Committee of the Board of Directors.
Dr. Felix Zandman, a founder of the Company, has been President, Chief
Executive Officer and a Director of the Company
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since its inception. Dr. Zandman has been Chairman of the Board since March
1989.
Richard N. Grubb has been a Director, Vice President, Treasurer and Chief
Financial Officer of the Company since May 1994. Mr. Grubb has been associated
with the Company in various capacities since 1972. He is a Certified Public
Accountant who was previously engaged in private practice.
Robert A. Freece has been a Director of the Company since 1972. He was Vice
President, Treasurer, Chief Financial Officer of the Company from 1972 until
1994, and has been Senior Vice President since May 1994.
Henry V. Landau has been a Vice President of the Company since 1983. Mr.
Landau has been the President and Chief Executive Officer of Measurements Group,
Inc., a subsidiary of the Company, since July 1984. Mr. Landau was an Executive
Vice President of Measurements Group, Inc. from 1981 to 1984 and has been
employed by the Company since 1972.
Abraham Inbar has been a Vice President of Company since June 1994. Mr.
Inbar has been the President of Vishay Israel Ltd., a subsidiary of the Company,
since May 1994. Mr. Inbar was Senior Vice President and General Manager of
Vishay Israel Ltd. from 1992 to 1994. Previously, Mr. Inbar was Vice President -
Operations for Vishay Israel Ltd. He has been employed by the Company since
1973.
William J. Spires has been a Vice President and Secretary of the Company
since 1981. Mr. Spires has been Vice President - Industrial Relations since 1980
and has been employed by the Company since 1970.
Donald G. Alfson has been a Director of the Company since May 1992 and the
President of Vishay Electronic Components North America and Asia, and President
of Dale Electronics, Inc. since April 1992. Mr. Alfson has been employed by Dale
since 1972.
Gerald Paul has served as a Director of the Company since May 1993 and
President of Vishay Electronic Components, Europe since January 1994. Dr. Paul
has been Managing Director of Draloric Electronic GmbH since January 1991. Dr.
Paul has been employed by Draloric since February 1978.
-14-
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
The Company's Common Stock is listed on the New York Stock Exchange under
the symbol VSH. The following table sets forth the high and low sales prices for
the Company's Common Stock as reported on the New York Stock Exchange Composite
Tape for the quarterly periods within the 1995 and 1994 fiscal years indicated.
Stock prices have been restated to reflect stock dividends and stock splits. The
Company does not currently pay cash dividends on its capital stock. Its policy
is to retain earnings to support the growth of the Company's business and the
Company does not intend to change this policy at the present time. In addition,
the Company is restricted from paying cash dividends under the terms of the
Company's revolving credit and term loan agreements (see Note 5 to the
consolidated financial statements). Holders of record of the Company's Common
Stock totalled approximately 1,668 at March 18, 1996.
COMMON STOCK MARKET PRICES
Calendar 1995 Calendar 1994
High Low High Low
---- --- ---- ---
First Quarter $ 28.88 $ 22.98 $ 18.15 $ 14.97
Second Quarter $ 37.88 $ 27.50 $ 19.76 $ 14.91
Third Quarter $ 44.38 $ 32.75 $ 21.55 $ 19.17
Fourth Quarter $ 42.13 $ 24.88 $ 24.94 $ 20.90
On November 27, 1995, the Company commenced a stock repurchase program
pursuant to which the Company was authorized to repurchase up to 750,000 shares
of its Common Stock for an aggregate amount not to exceed $30 million. The
purchases of Common Stock by the Company under the repurchase program are made
in accordance with the rules of the Securities and Exchange Commission and at
the discretion of management. As of December 31, 1995 the Company had
repurchased 110,000 shares at an approximate cost of $3,578,000. No repurchases
were made in 1993 or 1994.
In addition, at March 18, 1996 the Company had outstanding 7,222,035 shares
of Class B Common Stock par value $.10 per share (the "Class B Stock") each of
which entitles the holder to ten votes. The Class B Stock generally is not
transferable and there is no market for those shares. The Class B Stock is
convertible, at the option of the holder, into Common Stock on a share for share
basis. Substantially all such Class B Stock is beneficially owned by Dr. Felix
Zandman, and a revocable trust for the benefit of Mr. Alfred P. Slaner. Dr.
Felix Zandman is an executive officer and director of the Company. Mr. Slaner
and his wife, Luella B. Slaner, are Trustees of the Slaner Trust, and
accordingly, Mrs. Slaner, a Vishay director, may also be deemed beneficially to
own such shares.
-15-
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial information
of the Company for the fiscal years ended December 31, 1995, 1994, 1993, 1992
and 1991. This table should be read in conjunction with the Consolidated
Financial Statements of the Company and the related notes thereto included
elsewhere in this Form 10-K.
Year Ended December 31,
--------------------------------------------------------------
1995 1994^1 1993^2 1992^3 1991
---- ------ ------ ------ ----
(in thousands except per share amounts)
- -----------------------------------------------------------------------------------------------
Net sales ................... $1,224,416 $987,837 $856,272 $664,226 $442,283
Interest expense ............ 29,443 24,769 20,624 19,110 15,207
Earnings before
income taxes and
cumulative effect of
accounting change ......... 122,974 74,116 50,894 37,924 27,253
Income taxes ................ 30,307 15,169 8,246 7,511 6,363
Earnings before cumulative
effect of accounting change 92,667 58,947 42,648 30,413 20,890
Cumulative effect of
accounting change for
income taxes .............. -- -- 1,427 -- --
Net earnings ................ 92,667 58,947 44,075 30,413 20,890
Total assets ................ 1,543,331 1,333,959 948,106 661,643 448,771
Long-term debt .............. 228,610 402,337 266,999 139,540 127,632
Working capital ............. 411,286 328,322 205,806 145,327 128,733
Stockholders' equity ........ 907,853 565,088 376,503 346,625 201,366
Earnings per share:^4
Before cumulative effect
of accounting change .... $1.71 $1.20 $0.91 $0.78 $0.57
Accounting change for
income taxes ............ -- -- 0.03 -- --
Net earnings .............. $1.71 $1.20 $0.94 $0.78 $0.57
Weighted average number
of shares outstanding^4/ ... 54,329 49,098 46,806 42,702 36,712
- --------
1 Includes the results from July 1, 1994 of Vitramon.
2 Includes the results from January 1, 1993 of Roederstein.
3 Includes the results from January 1, 1992 of the acquired Sprague
businesses.
4 Adjusted to reflect 2-for-1 stock split distributed June 16, 1995 and
5% stock dividends paid on March 31, 1995, June 13, 1994 and June 11,
1993.
16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION AND BACKGROUND
The Company's sales and net income have increased significantly in the past
several years primarily as a result of its acquisitions. Following each
acquisition, the Company implemented programs to take advantage of distribution
and operating synergies among its businesses. This implementation is reflected
in an increase in the Company's sales and in the decline in selling, general,
and administrative expenses as a percentage of the Company's sales.
From mid-1990 through the end of 1993, sales of most of the Company's
products were adversely affected by the worldwide slowdown in the electronic
components industry, which reflected general recessionary trends in all major
industrialized countries. In addition, sales to defense-related industries
declined from the end of the first quarter of 1991 until the second half of
1993. Despite this slowdown, Vishay realized record net earnings in each year
throughout this period. This was a result of its acquisitions and focus on the
bottom-line, including the implementation of operating efficiencies.
In 1995, the Company's growth was fueled not only by its acquisition of
Vitramon, but also by the dramatic expansion in the electronic components
industry. This resulted in Vishay's record net earnings of $92.7 million in
1995. Since early 1994, demand for most passive electronic components has been
extremely strong and, in the case of certain products (such as tantalum
capacitors), has exceeded available supply, resulting in increased backlogs and
favorable pricing. During the last quarter of 1995 and into the first quarter of
1996 the Company has experienced an overall softening in demand for its
products, resulting in a decrease in backlogs. The Company believes this may be
primarily a result of the unusually large build up of Vishay components in its
customers' inventories during the first half of 1995. The Company believes it is
too early to discern whether this slowdown is indicative of a longer term trend;
the Company, however, will continue to closely monitor its orders and backlog.
The Company's strategy includes transferring some of its manufacturing
operations from countries with high labor costs and tax rates (such as the
United States, France and Germany) to Israel, Mexico, Portugal and the Czech
Republic in order to benefit from lower labor costs and, in the case of Israel,
to take advantage of various government incentives, including government grants
and tax incentives. Management believes that the Company is well positioned to
reduce its costs in the event of a decline in demand by accelerating the
transfer of production to countries with lower labor costs and more favorable
tax environments.
-17-
The Company realizes 51% of its revenues outside the United States. As a
result, fluctuations in currency exchange rates can significantly affect the
Company's reported sales and to a lesser extent earnings. Currency fluctuations
impact the Company's net sales and other income statement amounts, as
denominated in U.S. dollars, including other income as it relates to foreign
exchange gains or losses. Generally, in order to minimize the effect of currency
fluctuations on profits, the Company endeavors to (i) borrow money in the local
currencies and markets where it conducts business, and (ii) minimize the time
for settling intercompany transactions. The Company does not purchase foreign
currency exchange contracts or other derivative instruments to hedge foreign
currency exposures.
As a result of the increased production by the Company's operations in
Israel over the past several years, the low tax rates in Israel (as compared to
the statutory rates in the United States) have had the effect of increasing the
Company's net earnings. The more favorable Israeli tax rates are applied to
specific approved projects and normally continue to be available for a period of
ten years or, if the investment in the project is over $20 million, for a period
of 15 years, which has been the case for most of the Company's projects in
Israel since 1994. New projects are continually being introduced. In addition,
the Israeli government offers certain incentive programs in the form of grants
designed to increase employment in Israel. Future grants and other incentive
programs offered to the Company by the Israeli government will likely depend on
the Company's continuing to increase capital investment and the number of the
Company's employees in Israel.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995 COMPARED TO
YEAR ENDED DECEMBER 31, 1994
Net sales for the year ended December 31, 1995 increased $236,579,000 or
23.9% from the prior year. The increase reflects the strong performance of
Vitramon, acquired July 1, 1994, and Vishay's other surface mount components
businesses. Net sales for the year ended December 31, 1995 includes $87,753,000
of net sales relating to Vitramon for the first six months of 1995.
The weakening of the U.S. dollar against foreign currencies for the year
ended December 31, 1995 in comparison to the prior year resulted in an increase
in reported sales of $57,128,000.
Net sales, exclusive of foreign currency fluctuations, increased 18.2% over
the prior year. Net sales, exclusive of foreign currency fluctuations and
Vitramon sales for the first six months, increased 9.3% over the prior year. Net
bookings for the year ended December 31, 1995 increased 7.8% over the prior
year.
Income statement captions as a percentage of sales and the effective tax
rates were as follows:
-18-
Year Ended
December 31
1995 1994
---- ----
Costs of products sold 73.7% 75.7%
Gross profit 26.3 24.3
Selling, general and
administrative expenses 13.0 13.9
Operating income 12.4 9.9
Earnings before income taxes 10.0 7.5
Effective tax rate 24.6 20.5
Net earnings 7.6 6.0
Costs of products sold for the year ended December 31, 1995 were 73.7%, of
net sales, as compared to 75.7% for the prior year. The factors contributing to
this decrease included: (i) the effect of the Mexican peso devaluation, which
contributed approximately $4,100,000 to gross profit for 1995, (ii) the fact
that gross profits for Vitramon were higher than Vishay's other operating
companies, (iii) Israeli government grants of $13,243,000 for the year ended
December 31, 1995, as compared to $10,999,000 for the prior year, and (iv) an
increase in production in Israel where labor costs are lower than in most other
regions in which Vishay manufactures. The increase in Israeli government grants
resulted from a significant increase in the Company's manufacturing operations
in Israel. Deferred income at December 31, 1995 relating to Israeli government
grants was $30,849,000.
Selling, general, and administrative expenses, for the year ended December
31, 1995 were 13.0% of net sales, as compared to 13.9% for the prior year.
Management continues to explore additional cost-saving opportunities.
Restructuring expenses of $4,200,000 in 1995 resulted from downsizing of
some of the Company's European operations and represent employee termination
benefits covering approximately 276 technical, production, administrative and
support employees located primarily in France and Germany. This downsizing is
expected to be completed by the end of 1996. At December 31, 1995, $3,370,000 of
restructuring costs are included in accrued expenses.
Interest costs increased by $4,664,000 for the year ended December 31, 1995
over the prior year as a result of an increase in average debt outstanding
resulting from the acquisition of Vitramon in July 1994 and purchases of
property and equipment.
The effective tax rate for the year ended December 31, 1995 was 24.6%
compared to 20.5% for the prior year. The higher effective tax rate for 1995
reflects increased earnings in higher tax rate countries.
The effect of low tax rates in Israel (as compared to the statutory rate in
the United States) has been to increase net
-19-
earnings by $19,183,000 and $15,291,000 for the years ended December 31, 1995
and 1994, respectively. The Israeli tax effect was more pronounced in 1995
primarily as a result of increased earnings for the Israeli operations as a
result of increased production.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO
YEAR ENDED DECEMBER 31, 1993
Net sales for the year ended December 31, 1994 increased $131,565,000 or
15.4% over the prior year. The increase reflects the acquisition of Vitramon in
July 1994. Net sales of Vitramon were $72,139,000 for the six months ended
December 31, 1994, an increase of 29.4% over the comparable 1993 period (prior
to its acquisition by the Company). Net sales, exclusive of Vitramon, during the
year ended December 31, 1994 increased by $59,426,000 or 6.9% over 1993. The
weakening of the U.S. dollar against foreign currencies in 1994 resulted in an
increase in reported sales of $7,208,000 over 1993.
Net sales, exclusive of Vitramon and foreign currency effects, in the
United States and Europe increased 6.1% over the prior year. Net bookings,
exclusive of Vitramon, for 1994 increased by 15.5% over the prior year. Net
bookings of Vitramon, for the six months ended December 31, 1994, increased by
34.5% over the comparable period of 1993 (prior to its acquisition by the
Company).
Costs of products sold for the year ended December 31, 1994 were 75.7% of
net sales as compared with 77.5% for the prior year. The principal factors
contributing to this decrease were: (i) the fact that gross profit margins for
Vitramon are higher than those for Vishay's other operating companies, (ii) an
increase of $7,575,000 or 221% in the amount of Israeli government grants
recognized as a reduction of costs of products sold in 1994 over the prior year
and (iii) a significant increase in production in Israel, where labor costs are
generally lower than in other regions in which Vishay manufactures. The increase
in Israeli government grants resulted primarily from an increase in the
Company's work force and capital investment in Israel.
Selling, general, and administrative expenses for the year ended December
31, 1994 and 1993 were 13.9% of net sales. Management continues to explore
additional cost saving opportunities.
Restructuring charges of $6,659,000 for the year ended December 31, 1993
consist primarily of severance costs related to the Company's decision to
downsize its European operations, primarily in France, as a result of the
European business climate. These costs were paid in 1994.
-20-
Income from unusual items of $7,221,000 for the year ended December 31,
1993 represents proceeds received for business interruption insurance claims
principally related to operations in Dimona, Israel.
Interest costs increased by $4,145,000 for the year ended December 31, 1994
as a result of increased rates and increased debt incurred for the acquisition
of Vitramon.
The effective tax rate for the year ended December 31, 1994 was 20.5%
compared to 16.2% for the prior year. The effective tax rate for 1993, exclusive
of the effect of nontaxable insurance proceeds, was 18.6%. The higher tax rate
for 1994 reflects the inclusion of Vitramon earnings in higher tax locations.
The effect of the low tax rates in Israel was to increase net earnings by
$15,291,000 and $11,644,000 for the years ended December 31, 1994 and 1993,
respectively. The Company's average income tax rate in Israel was approximately
4% for both 1994 and 1993. The Israeli pre tax grants recognized by the Company
were $10,999,000 and $3,424,000 for the years ended December 31, 1994 and 1993,
respectively.
Effective January 1, 1993 the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes." The cumulative effect of
adopting Statement 109 as of January 1, 1993 was to increase net income by
$1,427,000. Application of the new income tax rules also decreased pretax
earnings by $2,870,000 for the year ended December 31, 1993 because of increased
depreciation expense as a result of Statement 109's requirement to report assets
acquired in prior business combinations at their pre-tax amounts.
The Company also adopted FASB Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," effective January 1, 1993. The
Company has elected to recognize the transition obligation on a prospective
basis over a twenty-year period. In 1993, the new standard resulted in
additional annual net periodic postretirement benefit costs of $1,200,000 before
taxes, and $792,000 after taxes, or $0.02 per share. Prior year financial
statements were not restated to apply the new standard.
FINANCIAL CONDITION
Cash flows from operations were $115,511,000 for the year ended December
31, 1995 compared to $46,467,000 for the prior year. Included in net cash
provided by operating activities for the years ended December 31, 1995 and 1994,
respectively, are $16,402,000 and $16,587,000 of cash payments made for
liabilities assumed in connection with acquisitions. Net purchases of property
and equipment for the year ended December 31, 1995 were $165,699,000
-21-
compared to $91,571,000 in the prior year. This increase reflects the Company's
on going program to purchase additional equipment to meet growing customer
demand for surface mount components. Net cash provided by financing activities
of $41,732,000 includes $230,279,000 of proceeds from a common stock offering
completed in September 1995, and used to prepay bank indebtedness. Additional
borrowings were used primarily to finance the additions to property and
equipment.
The Company has established accruals relating to the Vitramon acquisition,
of which $12,327,000 remains at December 31, 1995. These accruals, which are
included in other accrued expenses and other liabilities, will not affect future
earnings but will require cash expenditures.
On June 27, 1995, the Company amended its bank credit facilities. The
amendment increased the Company's domestic revolving credit facility by $100
million, extended the maturity of its domestic and Deutsche Mark ("DM")
denominated revolving credit facilities and gave the Company the right to
increase its domestic revolving credit facility by an additional $100 million by
prepaying its outstanding non amortizing term loan on or before
July 1, 1996.
See Note 5 to the Company's Consolidated Financial Statements elsewhere
herein for additional information with respect to Vishay's loan agreements,
long-term debt and available short- term credit lines.
The Company's financial condition at December 31, 1995 is strong, with a
current ratio of 2.8 to 1. The Company's ratio of long-term debt (less current
portion) to stockholders' equity was .25 to 1 at December 31, 1995 and .71 to 1
at December 31, 1994.
The Company's capital expenditures for the years ended December 31, 1995,
1994 and 1993 were $165.7 million, $91.6 million and $79.4 million,
respectively. Planned capital expenditures of approximately $200 million in
fiscal 1996 relate principally to construction of new facilities in Israel and
the purchase of equipment to increase capacity and maximize automation in the
Company's plants.
Management believes that the Company's available sources of credit,
together with cash expected to be generated from operations, will be sufficient
to satisfy the Company's anticipated financing needs for working capital and
capital expenditures during the next twelve months.
INFLATION
Normally, inflation has not had 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
-22-
extent permitted by competition, can be adjusted to reflect cost increases
caused by inflation.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Consolidated Financial Statements of the Company and its
subsidiaries, together with the report of independent auditors thereon, are
presented under Item 14 of this report:
Report of Independent Auditors
Consolidated Balance Sheets -- December 31, 1995 and 1994.
Consolidated Statements of Operations -- for the years ended December 31,
1995, 1994 and 1993.
Consolidated Statements of Cash Flows -- for the years ended December 31,
1995, 1994 and 1993.
Consolidated Statements of Stockholders' Equity -- for the years ended
December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements -- December 31, 1995.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Information with respect to Items 10, 11, 12 and 13 on Form 10-K is set
forth in the Company's definitive proxy statement, which will be filed within
120 days of December 31, 1995, the Company's most recent fiscal year. Such
information is incor- porated herein by reference, except that information with
respect to Executive Officers of Registrant is set forth in Part I, Item 4A
hereof under the caption, "Executive Officers of the Registrant".
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) All Consolidated Financial Statements of the Company and its
subsidiaries for the year ended December 31, 1995 are filed
herewith.
-23-
See Item 8 of this Report for a list of such financial statements.
(2) All financial statement schedules for which provision is made in
the applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
(3) Exhibits -- See response to paragraph (c) below.
(b) Reports on Form 8-K
None
(c) Exhibits:
2.1 Stock Purchase Agreement, dated July 12, 1994, between Thomas & Betts
Corporation and Vishay Intertechnology, Inc. Incorporated by reference
to Exhibit (2.1) to the Current Report on 8-K dated July 18, 1994.
3.1 Composite Amended and Restated Certificate of Incorporation of the
Company dated August 3, 1995. Incorporated by reference to Exhibit 3.1
to Form 10-Q for the quarter ended June 30, 1995 (the "1995 Form 10-
Q").
3.2 Amended and Restated Bylaws of Registrant. Incorporated by reference to
Exhibit 3.2 to Registration Statement No. 33-13833 of Registrant on
Form S-2 under the Securities Act of 1933 (the "Form S-2") and
Amendment No. 1 to Amended and Restated Bylaws of Registrant
Incorporated by reference to Exhibit 3.2 to Form 10-K file number
1-7416 for fiscal year ended December 31, 1993 (the "1993 Form 10-K").
10.1 Performance-Based Compensation Plan for Chief Executive Officer of
Registrant. Incorporated by reference to Exhibit 10.1 to the 1993 Form
10-K.
10.2 The First Amendment dated June 27, 1995, to the Amended and Restated
Vishay Intertechnology, Inc. $302,500,000 Revolving Credit and Term
Loan Agreement dated as of July 18, 1994 by and among Comerica Bank,
NationsBank of North Carolina, N.A., Berliner Handels-und Frankfurter
Bank, Signet Bank Maryland, CoreStates Bank, N.A., Bank Hapoalim, B.M.,
ABN AMRO Bank N.V., Credit Lyonnais New York Branch, Meridian Bank,
Bank Leumi le-Israel, B.M. and Credit Suisse (collectively, the
"Banks"), Comerica
-24-
Bank,as agent for the Banks (the "Agent"), and Vishay Intertechnology,
Inc. ("Vishay"), and the Vishay Intertechnology, Inc. $200,000,000
Acquisition Loan Agreement dated as of July 18, 1994 by and among the
Banks, the Agent and Vishay. Incorporated by reference to Exhibit 10.4
to the 1995 Form 10-Q.
10.3 The First Amendment, dated June 27, 1995, to the Amended and Restated
Vishay Europe GmbH DM 40,000,000 Revolving Credit and DM 9,506,000 Term
Loan Agreement dated as of July 18, 1994 by and among the Banks, the
Agent and Vishay Europe GmbH ("VEG"), and the Amended and Restated
Roederstein DM 104,315,990.20 Term Loan Agreement dated as of July 18,
1994 by and among the Banks, the Agent and VEG. Incorporated by
reference to Exhibit 10.5 to the 1995 Form 10-Q.
10.4 Amended and Restated Vishay Intertechnology, Inc. $302,500,000
Revolving Credit and Term Loan Agreement, dated as of July 18, 1994, by
and among the Banks and Vishay, Inc. ("Vishay"). Incorporated by
reference to Exhibit (10.1) to the Current Report on Form 8-K dated
July 18, 1994 (the "July 1994 8-K").
10.5 Amended and Restated Vishay Beteiligungs GmbH DM 40,000,000 Revolving
Credit and DM 9,506,000 Term Loan Agreement, dated as of July 18, 1994,
by and among the Former Banks, the Agent and Vishay Beteiligungs GmbH
("VBG"). Incorporated by reference to Exhibit (10.2) to the July 1994
8-K.
10.6 Amended and Restated Roederstein DM 104,315,990.20 Term Loan Agreement,
dated as of July 18, 1994, by and among the Former Banks, the Agent,
Vishay and VBG. Incorporated by reference to Exhibit (10.3) to the July
1994 8-K.
10.7 Vishay Intertechnology, Inc. $200,000,000 Acquisition Loan Agreement,
dated as of July 18, 1994, by and among the Banks, the Agent and
Vishay. Incorporated by reference to Exhibit (10.4) to the July 1994
8-K.
10.8 Amended and Restated Guaranty by Vishay to the Banks, dated July 18,
1994. Incorporated by reference to Exhibit (10.5) to the July 1994 8-K.
10.9 Employment Agreement, dated as of March 15, 1985, between the Company
and Dr. Felix Zandman. Incorporated by reference to Exhibit (10.12) to
the Form S-2.
10.10 Vishay Intertechnology 1995 Stock Option Program. Incorporated by
reference to the Company's Registration Statement on Form S-8 (No.
33-59609).
-25-
10.11 1986 Employee Stock Plan of the Company. Incorporated by reference to
Exhibit 4 to the Company's Registration Statement on Form S-8 (No.
33-7850).
10.12 1986 Employee Stock Plan of Dale Electronics, Inc. Incorporated by
reference to Exhibit 4 to the Company's Registration Statement on Form
S-8 (No. 33-7851).
10.13 Money Purchase Plan Agreement of Measurements Group, Inc. Incorporated
by reference to Exhibit 10(a)(6) to Amendment No. 1 to the Company's
Registration Statement on Form S-7 (No. 2-69970).
22. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
-26-
Report of Independent Auditors
Board of Directors and Stockholders
Vishay Intertechnology, Inc.
We have audited the accompanying consolidated balance sheets of Vishay
Intertechnology, Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, cash flows, and stockholders' equity for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Vishay
Intertechnology, Inc. at December 31, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles.
As discussed in the Notes to Consolidated Financial Statements, in 1993 the
Company changed its methods of accounting for income taxes (Note 4) and
postretirement benefits other than pensions (Note 9).
Philadelphia, Pennsylvania /s/ Ernst & Young LLP
February 6, 1996 ---------------------
Vishay Intertechnology, Inc.
Consolidated Balance Sheets
(In thousands, except per share and share amounts)
DECEMBER 31
1995 1994
------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 19,584 $ 26,857
Accounts receivable, less allowances
of $6,915 and $8,803 180,383 165,188
Inventories:
Finished goods 148,846 101,008
Work in process 92,166 94,005
Raw materials 121,180 108,594
Prepaid expenses and other current
assets 78,039 64,909
------------------------------------
Total current assets 640,198 560,561
Property and equipment--at cost:
2
Land 46,073 40,113
Buildings and improvements 197,164 171,689
Machinery and equipment 603,175 484,582
Construction in progress 76,564 48,689
------------------------------------
922,976 745,073
Less allowances for depreciation (253,748) (201,671)
------------------------------------
669,228 543,402
Goodwill 218,102 226,534
Other assets 15,803 14,573
------------------------------------
$1,543,331 $1,345,070
====================================
3
DECEMBER 31
1995 1994
------------------------------------
Liabilities and stockholders' equity
Current liabilities:
Notes payable to banks $22,174 $28,285
Trade accounts payable 66,942 63,318
Payroll and related expenses 43,790 39,155
Other accrued expenses 51,102 64,505
Income taxes 7,083 1,849
Current portion of long-term debt 37,821 35,127
------------------------------------
Total current liabilities 228,912 232,239
Long-term debt--less current portion 228,610 402,337
Deferred income taxes 42,044 32,554
Other liabilities 59,866 37,623
Accrued pension costs 76,046 75,229
Stockholders' equity:
Preferred Stock, par value $1.00 a share:
Authorized--1,000,000 shares; none
issued
4
Common Stock, par value $.10 a share:
Authorized--65,000,000 shares;
51,139,826 and 45,145,926 shares
outstanding after deducting 209,881
and 102,402 shares in treasury 5,114 2,257
Class B convertible Common Stock, par
value $.10 a share: Authorized--
15,000,000 shares; 7,222,035 and
7,547,544 shares outstanding after
deducting 229,518 and 254,128
shares in treasury 722 377
Capital in excess of par value 734,316 509,966
Retained earnings 146,370 53,734
Foreign currency translation adjustment 28,487 4,584
Unearned compensation (364) (20)
Pension adjustment (6,792) (5,810)
------------------------------------
907,853 565,088
------------------------------------
$1,543,331 $1,345,070
====================================
See accompanying notes.
5
Vishay Intertechnology, Inc.
Consolidated Statements of Operations
(In thousands, except per share and share amounts)
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Net sales $1,224,416 $987,837 $856,272
Costs of products sold 902,518 748,135 663,239
---------------------------------------------
Gross profit 321,898 239,702 193,033
Selling, general, and
administrative expenses 158,821 137,124 118,906
Amortization of goodwill 6,461 4,609 3,294
Restructuring expense 4,200 - 6,659
Unusual items - - (7,221)
---------------------------------------------
152,416 97,969 71,395
Other income (expense):
Interest expense (29,433) (24,769) (20,624)
Other (9) 916 123
---------------------------------------------
(29,442) (23,853) (20,501)
---------------------------------------------
Earnings before income taxes
and cumulative effect of
accounting change 122,974 74,116 50,894
Income taxes 30,307 15,169 8,246
---------------------------------------------
6
---------------------------------------------
Earnings before cumulative
effect of accounting change 92,667 58,947 42,648
Cumulative effect of accounting
change for income taxes - - 1,427
---------------------------------------------
Net earnings $92,667 $58,947 $44,075
=============================================
Earnings per share:
Before cumulative effect of
accounting change $1.71 $1.20 $0.91
Accounting change for
income taxes - - 0.03
---------------------------------------------
Net earnings $1.71 $1.20 $0.94
=============================================
Weighted average shares
outstanding 54,329,000 49,098,000 46,806,000
=============================================
See accompanying notes.
7
Vishay Intertechnology, Inc.
Consolidated Statements of Cash Flows
(In thousands)
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Operating activities
Net earnings $92,667 $58,947 $44,075
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 69,547 57,742 48,578
Other 30,034 19,410 1,667
Changes in operating assets and
liabilities:
Accounts receivable (8,147) (12,921) 2,804
Inventories (48,123) (44,195) (22,780)
Prepaid expenses and other
current assets (14,023) (23,119) 182
Accounts payable 998 3,023 (7,768)
Other current liabilities (7,442) (12,420) (14,080)
---------------------------------------------
Net cash provided by operating
activities 115,511 46,467 52,678
Investing activities
Purchases of property and equipment (165,699) (91,571) (79,377)
Purchases of businesses, net of cash
acquired - (179,847) (12,967)
---------------------------------------------
8
---------------------------------------------
Net cash used in investing activities (165,699) (271,418) (92,344)
Financing activities
Proceeds from revolving lines of
credit and long-term borrowings 302,700 372,321 265,274
Principal payments on revolving
lines of credit and long-term debt (480,481) (245,711) (235,124)
Cash (used in) provided by net
changes in short-term borrowings (7,188) 3,879 4,873
Purchases of common stock (3,578) - -
Proceeds from sale of common stock 230,279 109,738 -
---------------------------------------------
Net cash provided by financing
activities 41,732 240,227 35,023
Effect of exchange rate
changes on cash 1,183 650 (403)
---------------------------------------------
Increase (decrease) in cash and
cash equivalents (7,273) 15,926 (5,046)
Cash and cash equivalents at
beginning of year 26,857 10,931 15,977
---------------------------------------------
Cash and cash equivalents at
end of year $19,584 $26,857 $10,931
=============================================
See accompanying notes.
9
Vishay Intertechnology, Inc.
Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts)
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Common Stock:
Beginning balance $2,257 $1,763 $1,679
Shares issued (5,777,300;
5,602,500; and 7,550 shares) 576 280 -
Stock dividends (1,091;
3,915,440; and 1,679,904 shares) - 196 84
Stock split 2,275 - -
Shares repurchased (110,000 shares) (11) - -
Conversions from Class B (325,509;
349,824; and 240 shares) 17 18 -
---------------------------------------------
Ending balance 5,114 2,257 1,763
Class B convertible Common Stock:
Beginning balance 377 359 342
Stock dividends (716,904 and
341,934 shares) - 36 17
Stock split 362 - -
Conversions to Common (325,509;
349,824; and 240 shares) (17) (18) -
---------------------------------------------
Ending balance 722 377 359
Capital in excess of par value:
Beginning balance 509,966 288,980 253,446
Shares issued 230,534 110,012 123
Stock dividends - 110,830 35,281
Stock split (2,637) - -
Shares repurchased (3,567) - -
Tax effects relating to stock plan 20 144 130
---------------------------------------------
Ending balance 734,316 509,966 288,980
Retained earnings:
Beginning balance 53,734 105,849 97,156
10
Net earnings 92,667 58,947 44,075
Stock dividends (31) (111,062) (35,382)
---------------------------------------------
Ending balance 146,370 53,734 105,849
Foreign currency translation adjustment:
Beginning balance 4,584 (13,109) (5,864)
Translation adjustment for
the year 23,903 17,693 (7,245)
---------------------------------------------
Ending balance 28,487 4,584 (13,109)
Unearned compensation:
Beginning balance (20) (60) (134)
Shares issued under stock plans
(27,300; 4,000; and 7,550 shares) (519) (70) (123)
Amounts expensed during the year 175 110 197
---------------------------------------------
Ending balance (364) (20) (60)
Pension adjustment:
Beginning balance (5,810) (7,279) -
Pension adjustment for the year (982) 1,469 (7,279)
---------------------------------------------
Ending balance (6,792) (5,810) (7,279)
---------------------------------------------
Total stockholders' equity $907,853 $565,088 $376,503
=============================================
See accompanying notes.
1994 amounts were retroactively adjusted for 5% stock dividend in March 1995.
11
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements
December 31, 1995
Vishay Intertechnology, Inc. is a leading international manufacturer and
supplier of passive electronic components, particularly resistors, capacitors
and inductors, offering its customers access to one of the most comprehensive
passive electronic component lines of any manufacturer in the United States or
Europe. Passive electronic components, together with semiconductors (integrated
circuits), which the Company does not produce, are the primary elements of
electronic circuits. Components manufactured by the Company are used in
virtually all types of electronic products, including those in the computer,
telecommunications, military/aerospace, instrument, automotive, medical and
consumer electronics industries.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of Vishay Intertechnology, Inc. include
the accounts of the Company and its subsidiaries, after elimination of all
significant intercompany transactions, accounts, and profits.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
INVENTORIES
Inventories are stated at the lower of cost, determined by the first-in,
first-out method, or market.
DEPRECIATION
Depreciation is computed principally by the straight-line method based upon the
estimated useful lives of the assets. Depreciation of capital lease assets is
included in total depreciation expense.
12
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements
December 31, 1995
Depreciation expense was $60,155,000, $51,301,000, and $43,493,000, for the
years ended December 31, 1995, 1994, and 1993, respectively.
13
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONSTRUCTION IN PROGRESS
The estimated cost to complete construction in progress at December 31, 1995 is
$67,440,000.
GOODWILL
Goodwill, representing the excess of purchase price over net assets of
businesses acquired, is being amortized on a straight-line basis over 40 years.
Accumulated amortization amounted to $23,737,000 and $17,966,000 at December 31,
1995 and 1994, respectively. The recoverability of goodwill is evaluated at the
operating unit level by an analysis of operating results and consideration of
other significant events or changes in the business environment. If an operating
unit has current operating losses and based upon projections there is a
likelihood that such operating losses will continue, the Company will measure
impairment on the basis of undiscounted expected future cash flows from
operations before interest for the remaining amortization period.
CASH EQUIVALENTS
For purposes of the Statement of Cash Flows, the Company considers demand
deposits and all highly liquid investments with maturities of three months or
less when purchased to be cash equivalents.
RESEARCH AND DEVELOPMENT EXPENSES
The amount charged to expense aggregated $10,430,000, $7,205,000, and $7,097,000
for the years ended December 31, 1995, 1994, and 1993, respectively. The Company
spends additional amounts for the development of machinery and equipment for new
processes and for cost reduction measures.
GRANTS
14
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
Grants received from governments by certain foreign subsidiaries, primarily in
Israel, are recognized as income in accordance with the purpose of the specific
contract and in the period in which the related expense is incurred. Grants
received from the government of Israel and recognized as a reduction of costs of
products sold were $13,243,000, $10,999,000, and $3,424,000 for the years ended
December 31, 1995, 1994, and 1993, respectively.
15
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GRANTS (CONTINUED)
Grants receivable of $20,585,000 and $16,674,000 are included in other current
assets at December 31, 1995 and 1994, respectively. Deferred grant income of
$30,849,000 and $11,111,000 is included in other liabilities at December 31,
1995 and 1994, respectively. The grants are subject to conditions, including
maintaining specified levels of employment for periods up to ten years.
Noncompliance with such conditions could result in repayment of grants, however,
management expects that the Company will comply with all terms and conditions of
grants.
SHARE AND PER SHARE AMOUNTS
All numbers of common shares and per share amounts have been adjusted to give
retroactive effect to a 2-for-1 stock split distributed on June 16, 1995.
Earnings per share is based on the weighted average number of common shares
outstanding during the period. No material dilution of earnings per share would
result if it was assumed that all outstanding stock options were exercised.
Earnings per share amounts for all periods presented reflect the 2-for-1 stock
split and 5% stock dividends paid on March 31, 1995, June 13, 1994, and June 11,
1993. Earnings per share for the year ended December 31, 1995 reflect the
weighted effect of the issuance of 5,750,000 shares of Common Stock in September
1995. Earnings per share for the years ended December 31, 1995 and 1994 reflect
the weighted effect of the issuance of 5,576,000 shares of Common Stock in
August 1994.
ACCOUNTING PRONOUNCEMENT PENDING ADOPTION
In March 1995, the FASB issued Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amounts. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company will adopt Statement 121
in the first quarter of 1996 and, based on current circumstances, does not
believe the effect of adoption will be material.
16
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING CHANGES
In 1993, the Company changed its methods of accounting for income taxes (Note 4)
and postretirement benefits other than pensions (Note 9).
RECLASSIFICATIONS
Certain prior-year amounts have been reclassified to conform with the current
presentation.
2. ACQUISITIONS
In July 1994, the Company purchased all of the capital stock of Vitramon,
Incorporated and Vitramon Limited, U.K. (collectively, "Vitramon") for
$184,000,000 in cash. Vitramon is a leading producer of multilayer ceramic chip
capacitors with manufacturing facilities primarily in the United States, France,
Germany, and the United Kingdom. In connection with the acquisition of Vitramon,
the Company borrowed an aggregate of $200,000,000 from a group of banks, of
which $100,000,000 was a bridge facility that was subsequently paid off with
proceeds from an equity offering completed in August 1994 and $100,000,000 was a
nonamortizing term loan of which $50,000,000 remains outstanding at December 31,
1995.
During January 1993, Vishay exercised its option to purchase the remaining 81%
of the outstanding share capital of Roederstein GmbH, a passive electronic
components manufacturer with headquarters in Germany for 4,050,000 Deutsche
Marks ("DM") ($2,502,000) pursuant to a 1992 option agreement. Vishay had
acquired its initial 19% interest in Roederstein in 1992 for DM 950,000
($577,000).
The acquisitions have been accounted for under the purchase method of
accounting. The operating results of Vitramon and Roederstein have been included
in the Company's consolidated results of operations from July 1, 1994 and
January 1, 1993, respectively. Excess of cost over the fair value of net assets
acquired (Vitramon--$104,582,000; Roederstein--$46,355,000) is being amortized
on a straight-line basis over forty years.
17
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
2. ACQUISITIONS (CONTINUED)
Had the Vitramon acquisition been made at the beginning of 1993, the Company's
pro forma unaudited results would have been (in thousands, except per share
amounts):
YEAR ENDED DECEMBER 31
1994 1993
------------------------------------
Net sales $1,056,520 $974,666
Net earnings 64,573 52,555
Earnings per share $1.23 $1.00
The unaudited pro forma results are not necessarily indicative of the results
that would have been attained had the acquisition occurred at the beginning of
1993 or of results which may occur in the future.
3. RESTRUCTURING EXPENSE AND UNUSUAL ITEMS
Restructuring expenses of $4,200,000 in 1995 result from downsizing of some of
the Company's European operations and represent employee termination costs
covering approximately 276 technical, production, administrative, and support
employees located primarily in France and Germany. This downsizing is expected
to be complete by the end of 1996. At December 31, 1995, $3,370,000 of
restructuring costs are included in accrued expenses.
Restructuring expenses of $6,659,000 recorded in 1993 related to a downsizing of
some of the Company's European operations which was completed in 1994. Income
from unusual items of $7,221,000 for 1993 represents insurance recoveries for
business interruption insurance claims.
18
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
4. INCOME TAXES
Effective January 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes." The cumulative effect of
adopting Statement 109 as of January 1, 1993 was to increase net earnings by
$1,427,000, or $.03 per share.
19
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
4. INCOME TAXES (CONTINUED)
For financial reporting purposes, earnings before income taxes and cumulative
effect of accounting change includes the following components (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Pretax income:
Domestic $34,926 $19,650 $13,136
Foreign 88,048 54,466 37,758
---------------------------------------------
$122,974 $74,116 $50,894
=============================================
Significant components of income taxes are as follows (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Current:
U.S. Federal $10,578 $5,187 $3,032
Foreign 10,927 3,251 2,706
State 1,082 882 332
---------------------------------------------
20
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
---------------------------------------------
22,587 9,320 6,070
Deferred:
U.S. Federal 2,247 1,889 1,960
Foreign 5,082 3,858 36
State 391 102 180
---------------------------------------------
7,720 5,849 2,176
---------------------------------------------
$30,307 $15,169 $8,246
=============================================
21
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
4. INCOME TAXES (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets are as follows (in thousands):
DECEMBER 31
1995 1994
------------------------------------
Deferred tax liabilities:
Tax over book depreciation $71,060 $61,023
Other--net 7,640 4,427
------------------------------------
Total deferred tax liabilities 78,700 65,450
------------------------------------
Deferred tax assets:
Pension and other retiree obligations 25,461 23,381
Net operating loss carryforwards 53,638 55,630
Restructuring reserves 3,631 5,865
Other accruals and reserves 16,368 10,842
------------------------------------
Total deferred tax assets 99,098 95,718
Valuation allowance for deferred
tax assets (45,700) (48,637)
------------------------------------
Net deferred tax assets 53,398 47,081
------------------------------------
22
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
------------------------------------
Net deferred tax liabilities $25,302 $18,369
====================================
A reconciliation of income tax expense at the U.S. federal statutory income tax
rate to actual income tax expense is as follows (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Tax at statutory rate $43,041 $25,941 $17,304
State income taxes, net of U.S.
federal tax benefit 1,094 684 396
Effect of foreign income tax rates (13,801) (13,194) (10,532)
Benefit of net operating loss
carryforwards (2,054) - -
Other 2,027 1,738 1,078
---------------------------------------------
$30,307 $15,169 $8,246
=============================================
23
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
4. INCOME TAXES (CONTINUED)
At December 31, 1995, the Company has net operating loss carryforwards for tax
purposes of approximately $115,805,000 in Germany (no expiration date),
$12,154,000 in France (expire December 31, 2000), and $5,518,000 in Portugal
(expire December 31, 1999). Approximately $86,893,000 of the carryforward in
Germany, and $5,211,000 of the carryforward in Portugal, resulted from the
Company's acquisition of Roederstein. For financial reporting purposes, a
valuation allowance of $45,700,000 has been recognized to offset deferred tax
assets related to foreign net operating loss carryforwards. In 1995, tax
benefits recognized through reductions of the valuation allowance had the effect
of reducing goodwill of acquired companies by $6,752,000. If additional tax
benefits are recognized in the future through further reduction of the valuation
allowance, $37,461,000 of such benefits will reduce goodwill. The valuation
allowance decreased from December 31, 1994 by $2,937,000 due to the tax benefits
recognized offset by foreign currency translation which had the effect of
increasing the deferred tax asset for net operating loss carryforwards.
At December 31, 1995, no provision has been made for U.S. federal and state
income taxes on approximately $280,538,000 of foreign earnings which are
expected to be reinvested indefinitely. Upon distribution of those earnings in
the form of dividends or otherwise, the Company would be subject to U.S. income
taxes (subject to an adjustment for foreign tax credits) and withholding taxes
payable to the various foreign countries. Determination of the amount of
unrecognized deferred U.S. income tax liability is not practicable because of
the complexities associated with its hypothetical calculation.
Income taxes paid were $30,272,000, $11,125,000, and $6,933,000 for the years
ended December 31, 1995, 1994, and 1993, respectively.
24
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
5. LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
DECEMBER 31
1995 1994
------------------------------------
Revolving Credit Loan $29,722 $100,000
Term Loan 87,500 97,500
Term Loan II 50,000 100,000
Deutsche Mark Revolving Credit Loan 27,778 25,808
Deutsche Mark Term Loan 35,775 55,239
Unsecured Credit Agreement -- 20,000
Other Debt and Capital Lease Obligations 35,656 38,917
------------------------------------
266,431 437,464
Less current portion 37,821 35,127
------------------------------------
$228,610 $402,337
====================================
As of December 31, 1995, five facilities were available under the Company's
amended and restated Revolving Credit and Term Loan and Deutsche Mark Revolving
Credit and Term Loan agreements with a group of banks; a multicurrency revolving
credit loan (interest 5.46% at December 31, 1995), a U.S. term loan (interest
6.11% at December 31, 1995), an additional U.S. term loan (interest 6.11% at
December 31, 1995), a Deutsche Mark revolving credit loan (interest 4.36% at
December 31, 1995), and a Deutsche Mark term loan (interest 4.49% at December
31, 1995). The terms of the five facilities are
25
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
summarized below. The first facility is a $350,000,000 multicurrency revolving
credit facility which is available to the Company until December 31, 2000. The
Company has the right to request up to three one-year renewals thereafter. This
facility will increase to $400,000,000 when the additional U.S. term loan has
been repaid. Interest is payable at prime or at other interest rate options. The
Company is required to pay a commitment fee equal to 1/8% per annum on the
average unused line. The second facility is an $87,500,000 term loan, with
interest payable at prime or at other interest rate options. Principal payments
are due as follows: 1996--$10,000,000; 1997--$15,000,000; 1998--$20,000,000;
1999--$20,000,000; 2000--$22,500,000. Additional principal payments may be
required based on excess cash flow as defined in the agreement. The third
facility is a $50,000,000 nonamortizing term loan which was used for the
purchase of Vitramon. The nonamortizing term loan is due June 30, 1996. Interest
is payable at prime or at other interest rate options. The loan agreements also
provide a German subsidiary of the Company with two Deutsche Mark ("DM")
facilities. The first DM facility is a DM 40,000,000 ($27,778,000) revolving
credit facility which is available
26
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
5. LONG-TERM DEBT (CONTINUED)
until December 31, 2000. The Company has the right to request up to three
one-year renewals thereafter. Interest is based on DM market rates plus .30%.
The Company is required to pay a commitment fee equal to 1/8% per annum on the
average unused line. The second DM facility is a DM 51,516,000 ($35,775,000)
term loan. Interest is based on DM market rates plus .43%. Principal payments of
DM 37,000,000 and 14,516,000 ($25,694,000 and $10,081,000) are due on or before
December 31, 1996 and 1997, respectively. Additional principal payments may be
required based on excess cash flow as defined in the agreement.
Under the loan agreements, the Company is restricted from paying cash dividends
and must comply with other covenants, including the maintenance of specific
ratios. The Company is in compliance with the restrictions and limitations under
the terms of loan agreements, as amended.
Other debt and capital lease obligations include borrowings under short-term
credit lines of $30,254,000 and $28,800,000 at December 31, 1995 and 1994,
respectively.
Borrowings under short-term credit lines and the payments due in 1996 relating
to the nonamortizing term loan are classified as long-term based on the
Company's intention and ability to refinance the obligations on a long-term
basis.
Aggregate annual maturities of long-term debt, excluding payments which may be
required based on excess cash flow, are as follows: 1996--$37,821,000;
1997--$26,112,000; 1998--$20,577,000; 1999--$20,912,000; 2000--$160,514,000;
thereafter--$495,000.
At December 31, 1995, the Company has committed and uncommitted short-term
credit lines with various U.S. and foreign banks aggregating $153,370,000, of
which $100,942,000 was unused. The weighted average interest rate on short-term
borrowings outstanding as of December 31, 1995 and 1994 was 6.31% and 6.03%,
respectively.
Interest paid was $29,459,000, $24,150,000, and $20,587,000 for the years ended
December 31, 1995, 1994, and 1993, respectively.
27
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
6. STOCKHOLDERS' EQUITY
On May 19, 1995, the Company's shareholders approved an increase in the number
of shares of Common Stock, $.10 par value, which the Company is authorized to
issue, from 35,000,000 shares to 65,000,000 shares.
The Company's Class B Stock carries ten votes per share while the Common Stock
carries one vote per share. Class B shares are transferable only to certain
permitted transferees while the Common Stock is freely transferable. Class B
shares are convertible on a one-for-one basis at any time to Common Stock.
Unearned compensation relating to Common Stock issued under employee stock plans
is being amortized over periods ranging from three to five years. At December
31, 1995, 234,973 shares are available for issuance under stock plans.
In 1995, certain key executives of the Company were granted options to purchase
1,052,100 shares of the Company's Common Stock. These options expire March 1,
2000, with one-third exercisable at $26.49 (the closing market price of the
Company's Common Stock on the date of grant), one-third exercisable at $33.33,
and one-third exercisable at $47.62.
7. OTHER INCOME
Other income (expense) consists of the following (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Foreign exchange gains (losses) $(2,022) $440 $(1,382)
Investment income 1,529 229 722
Other 484 247 783
---------------------------------------------
$(9) $916 $123
=============================================
28
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
8. EMPLOYEE RETIREMENT PLANS
The Company maintains various defined benefit pension plans covering
substantially all full-time U.S. employees. The benefits under these plans are
based on the employees' compensation during all years of participation.
Participants in these plans, other than U.S. employees of Vitramon, are required
to contribute an amount based on annual earnings. The Company's funding policy
is to contribute annually amounts that satisfy the funding standard account
requirements of ERISA. The assets of these plans are invested primarily in
mutual funds and guaranteed investment contracts issued by an insurance company
and a bank.
29
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
8. EMPLOYEE RETIREMENT PLANS (CONTINUED)
Net pension cost for the Plans included the following components (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Annual service cost--benefits
earned for the period $3,613 $2,547 $2,233
Less: Employee contributions 1,459 1,142 1,157
---------------------------------------------
Net service cost 2,154 1,405 1,076
Interest cost on projected
benefit obligation 5,702 5,153 4,732
Actual return on Plan assets (11,892) (1,702) (5,270)
Net amortization and deferral 7,211 (3,349) 655
---------------------------------------------
Net pension cost $3,175 $1,507 $1,193
=============================================
The expected long-term rate of return on assets was 8.5% - 9.5%.
The following table sets forth the funded status of the Plans and amounts
recognized in the Company's financial statements (in thousands):
DECEMBER 31
1995 1994
------------------------------------
30
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
Accumulated benefit obligation,
including vested benefits of
$75,636 and $66,601 $75,949 $67,083
====================================
Actuarial present value of
projected benefit obligations $(82,105) $(72,144)
Plan assets at fair value 78,686 62,513
------------------------------------
Projected benefit obligations
in excess of Plan assets (3,419) (9,631)
Unrecognized loss 3,043 3,904
Unrecognized prior service cost 834 1,067
Unrecognized net obligation at
transition date, being
recognized over 15 years 356 466
-------------------------------------
Accrued pension liability $814 $(4,194)
=====================================
The following assumptions have been used in the actuarial determinations of the
Plans:
1995 1994
------------------------------------
Discount rate 7.25% 8.25%
Rate of increase in compensation levels 4.5% - 5.0% 4.5% - 5.0%
8. EMPLOYEE RETIREMENT PLANS (CONTINUED)
Many of the Company's U.S. employees are eligible to participate in 401(k)
Savings Plans, some of which provide for Company matching under various
formulas. The Company's matching expense for the plans was $2,314,000,
$2,282,000, and $1,996,000 for the years ended December 31, 1995, 1994, and
1993, respectively.
The Company provides pension and similar benefits to employees of certain
foreign subsidiaries consistent with local practices. German subsidiaries of the
Company have noncontributory defined benefit pension plans covering management
and employees. Pension benefits are based on years
31
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
of service. Net pension cost for the German Plans included the following
components (in thousands):
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Annual service cost--benefits
earned for the period $164 $138 $682
Interest cost on projected
benefit obligation 5,267 4,496 4,521
Actual return on plan assets (854) (1,039) (796)
Net amortization and deferral (220) 83 (86)
---------------------------------------------
Net pension cost $4,357 $3,678 $4,321
=============================================
The expected long-term rate of return on assets was 2.0%.
The following table sets forth the funded status of the German Plans and amounts
recognized in the Company's financial statements (in thousands):
DECEMBER 31
1995 1994
------------------------------------
Accumulated benefit obligation,
including vested benefits of
$76,556 and $69,910 $77,445 $70,947
====================================
Actuarial present value of projected
benefit obligations $(77,791) $(71,223)
32
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
Plan assets at fair value 15,331 13,585
------------------------------------
Projected benefit obligations in
excess of plan assets (62,460) (57,638)
Unrecognized loss 4,935 4,240
Unrecognized prior service cost 571 590
Unrecognized net asset at
transition date, being
recognized over 15 years (36) (37)
Additional minimum liability,
recognized as a reduction of
stockholders' equity (6,792) (5,810)
------------------------------------
Accrued pension liability $(63,782) $(58,655)
====================================
The following assumptions have been used in the actuarial determinations of the
German Plans:
Discount rate 7.0%
Rate of increase in compensation levels 3.0%
9. POSTRETIREMENT MEDICAL BENEFITS
The Company pays limited health care premiums for certain eligible retired U.S.
employees. Effective January 1, 1993, the Company adopted FASB Statement No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" and
elected to recognize the transition obligation, which represents the previously
unrecognized prior service cost, on a prospective basis over a twenty-year
period.
Net postretirement benefit cost included the following components (in
thousands):
33
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------------
Service cost $215 $214 $351
Interest cost 497 453 713
Net amortization and deferral 245 230 424
---------------------------------------------
Net postretirement benefit cost $957 $897 $1,488
=============================================
The 1993 cost information does not include the effects of Plan amendments made
at the end of 1993 which capped employer contributions for each participant at
1993 dollar amounts. The Company continues to fund postretirement medical
benefits on a pay-as-you-go basis.
34
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
9. POSTRETIREMENT MEDICAL BENEFITS (CONTINUED)
The status of the plan and amounts recognized in the Company's consolidated
balance sheet were as follows (in thousands):
DECEMBER 31
1995 1994
------------------------------------
Accumulated postretirement benefit
obligation:
Retirees $(2,075) $(2,173)
Actives eligible to retire (1,402) (1,104)
Other actives (3,712) (2,719)
------------------------------------
Total (7,189) (5,996)
Unrecognized loss 1,440 519
Unrecognized transition obligation 3,635 3,849
------------------------------------
Accrued postretirement benefit liability $(2,114) $(1,628)
====================================
The discount rates used in the calculations were 7.25% for 1995 and 8.25% for
1994.
10. LEASES
35
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
Total rental expense under operating leases was $9,984,000, $8,871,000, and
$7,528,000 for the years ended December 31, 1995, 1994, and 1993, respectively.
Future minimum lease payments for operating leases with initial or remaining
noncancelable lease terms in excess of one year are as follows:
1996--$6,242,000; 1997--$4,446,000; 1998--$3,115,000; 1999--$2,082,000;
2000--$1,868,000; thereafter--$7,204,000.
11. FINANCIAL INSTRUMENTS
Financial instruments with potential credit risk consist principally of accounts
receivable. Concentrations of credit risk with respect to receivables are
limited due to the Company's large number of customers and their dispersion
across many countries and industries. At December 31, 1995 and 1994, the Company
had no significant concentrations of credit risk. The amounts reported in the
balance sheet for cash and cash equivalents and for short-term and long-term
debt approximate fair value.
36
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
12. CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS
SOURCES OF SUPPLY
Although most materials incorporated in the Company's products are available
from a number of sources, certain materials (particularly tantalum and
palladium) are available only from a relatively limited number of suppliers.
Tantalum, a metal, is the principal material used in the manufacture of tantalum
capacitor products. It is purchased in powder form primarily under annual
contracts with domestic suppliers at prices that are subject to periodic
adjustment. The Company is a major consumer of the world's annual tantalum
production. There are currently three major suppliers that process tantalum ore
into capacitor grade tantalum powder. Although the Company believes that there
is currently a surplus of tantalum ore reserves and a sufficient number of
tantalum processors relative to foreseeable demand, and that the tantalum
required by the Company has generally been available in sufficient quantities to
meet requirements, the limited number of tantalum powder suppliers could lead to
increases in tantalum prices that the Company may not be able to pass on to its
customers. Palladium is primarily purchased on the spot and forward markets,
depending on market conditions. Palladium is considered a commodity and is
subject to price volatility. Although palladium is currently found in South
Africa and Russia, the Company believes that there are a sufficient number of
domestic and foreign suppliers from which the Company can purchase palladium.
However, an inability on the part of the Company to pass on increases in
palladium costs to its customers could have an adverse effect on the margins of
those products using the metal.
GEOGRAPHIC CONCENTRATION
To address the increasing demand for its products and in order to lower its
costs, the Company has expanded, and plans to continue to expand, its
manufacturing operations in Israel in order to take advantage of that country's
lower wage rates, highly skilled labor force, government-sponsored grants, as
well as various tax abatement programs. These incentive programs have
contributed substantially to the growth and profitability of the Company. The
Company might be materially and adversely affected if these incentive programs
were no longer available to the Company or if hostilities were to occur in the
Middle East that materially interfere with the Company's operations in Israel.
37
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
13. SEGMENT AND GEOGRAPHIC INFORMATION
Vishay operates in one line of business--the manufacture of electronic
components. Information about the Company's operations in different geographic
areas is as follows (in thousands):
United States Europe Israel Other Elimination Consolidated
------------- ------ ------ ----- ----------- ------------
Year ended
December 31, 1995
- -----------------
Net sales to unaffiliated
customers $597,154* $589,488 $5,684 $32,090 $-- $1,224,416
Net sales between
geographic areas $74,283 53,883 214,322 341 (342,829) --
------------------------------------------------------------------------
Total net sales $671,437 $643,371 $220,006 $32,431 $(342,829) $1,224,416
========================================================================
Operating profit $59,877 $31,759 $66,640 $5,528 $-- $163,804
========================================================================
General corporate
expenses (11,397)
Interest expense (29,433)
----------
Earnings before income
taxes $122,974
==========
Identifiable assets $610,106 $653,395 $255,268 $24,562 $- $1,543,331
========================================================================
38
United States Europe Israel Other Elimination Consolidated
------------- ------ ------ ----- ----------- ------------
Year ended
December 31, 1994
- -----------------
Net sales to unaffiliated
customers $495,004* $466,552 $3,687 $22,594 $-- $987,837
Net sales between
geographic areas 25,339 65,705 139,615 -- (230,659) --
------------------------------------------------------------------------
Total net sales $520,343 $532,257 $143,302 $22,594 $(230,659) $987,837
========================================================================
Operating profit $43,889 $15,129 $45,091 $4,842 $-- $108,951
========================================================================
General corporate
expenses (10,066)
Interest expense (24,769)
----------
Earnings before income
taxes $74,116
==========
Identifiable assets $555,418 $614,998 $152,329 $22,325 $- $1,345,070
========================================================================
39
13. SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)
United States Europe Israel Other Elimination Consolidated
------------- ------ ------ ----- ----------- ------------
Year ended
December 31, 1993
- -----------------
Net sales to unaffiliated
customers $426,695* $407,527 $3,923 $18,127 $-- $856,272
Net sales between
geographic areas 13,245 33,548 67,939 -- (114,732) --
------------------------------------------------------------------------
Total net sales $439,940 $441,075 $71,862 $18,127 $(114,732) $856,272
========================================================================
Operating profit $31,302 $11,932 $33,467 $3,100 $-- $79,801
========================================================================
General corporate
expenses (8,283)
Interest expense (20,624)
----------
Earnings before income
taxes and cumulative
effect of accounting
change $50,894
==========
Identifiable assets $375,456 $470,434 $88,198 $16,582 $-- $950,670
========================================================================
* Includes export sales of $123,387, $107,196, and $78,793, for the years ended
December 31, 1995, 1994, and 1993, respectively.
Sales between geographic areas are priced to result in operating profit which
approximates that earned on sales to unaffiliated customers. Operating profit is
total revenue less operating expenses. In computing operating profit, general
corporate expenses, interest expense, and income taxes were not deducted.
40
Vishay Intertechnology, Inc.
Notes to Consolidated Financial Statements (continued)
14. SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended December 31, 1995 and 1994
is as follows:
(In thousands, except per share amounts)
First Quarter Second Quarter Third Quarter Fourth Quarter Year
--------------------- --------------------- ----------------------- --------------------- -----------------------
1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net sales $310,284 $226,015 $315,461 $226,683 $300,629 $260,963 $298,042 $274,176 $1,224,416 $987,837
Gross profit 79,265 50,800 83,526 55,452 79,265 64,927 79,842 68,523 321,898 239,702
Net earnings 22,034 12,658 24,724 14,226 22,332 14,561 23,577 17,502 92,667 58,947
Earnings per
share (1):
Net earnings $.42 $.27 $.47 $.31 $.42 $.29 $.40 $.33 $1.71 $1.20
(1) Adjusted to give effect to 5% stock dividends in March 1995 and June 1994,
and the 2-for-1 stock split distributed on June 16, 1995.
41
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) 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.
March 21, 1996 /s/Felix Zandman
-----------------------------------
Felix Zandman, Chairman
of the Board, President,
Chief Executive Officer
& Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated below.
March 21, 1996 /s/Felix Zandman
-----------------------------------
Felix Zandman, Chairman
of the Board, Director,
President and Chief
Executive Officer
(Principal Executive Officer)
March 21, 1996 /s/Richard N. Grubb
-----------------------------------
Richard N. Grubb
Director, Vice President,
Treasurer and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
March 21, 1996 /s/Donald G. Alfson
-----------------------------------
Donald G. Alfson, Director and
Vice President
President of Vishay Electronic
Components, U.S. and Asia
March 21, 1996 /s/Avi D. Eden
-----------------------------------
Avi D. Eden, Director
-27-
March 21, 1996 ` /s/Robert A. Freece
-----------------------------------
Robert A. Freece, Director,
Senior Vice President
March 21, 1996 /s/Eli Hurvitz
-----------------------------------
Eli Hurvitz, Director
March 21, 1996 /s/Gerald Paul
-----------------------------------
Gerald Paul, Director and
Vice President
President of Vishay Electronic
Components, Europe
March 21, 1996 /s/Edward B. Shils
-----------------------------------
Edward B. Shils, Director
March 21, 1996 /s/Luella B. Slaner
-----------------------------------
Luella B. Slaner, Director
March 21, 1996 /s/Mark I. Solomon
-----------------------------------
Mark I. Solomon, Director
March 21, 1996 /s/Jean-Claude Tine
-----------------------------------
Jean-Claude Tine, Director
-28-
EXHIBIT INDEX
Page Number in
Exhibit sequentially
No. Description Numbered Copy
- ------- ----------- -------------
2.1 Stock Purchase Agreement, dated July 12,
1994, between Thomas & Betts Corporation
and Vishay Intertechnology, Inc.
Incorporated by reference to Exhibit
(2.1) to the Current Report on 8-K dated
July 18, 1994.
3.1 Composite Amended and Restated
Certificate of Incorporation of the
Company dated August 3, 1995.
Incorporated by reference to Exhibit 3.1
to Form 10-Q for the quarter ended June
30, 1995 (the "1995 Form 10-Q").
3.2 Amended and Restated Bylaws of
Registrant. Incorporated by reference to
Exhibit 3.2 to Registration Statement
No. 33-13833 of Registrant on Form S-2
under the Securities Act of 1933 (the
"Form S- 2") and Amendment No. 1 to
Amended and Restated Bylaws of
Registrant Incorporated by reference to
Exhibit 3.2 to Form 10-K file number
1-7416 for fiscal year ended December
31, 1993 (the "1993 Form 10-K").
10.1 Performance-Based Compensation Plan for
Chief Executive Officer of Registrant.
Incorporated by reference to Exhibit
10.1 to the 1993 Form 10-K.
-29-
Page Number in
Exhibit sequentially
No. Description Numbered Copy
- ------- ----------- -------------
10.2 The First Amendment dated June 27,
1995, to the Amended and Restated Vishay
Intertechnology, Inc. $302,500,000
Revolving Credit and Term Loan Agreement
dated as of July 18, 1994 by and among
Comerica Bank, NationsBank of North
Carolina, N.A., Berliner Handels-und
Frankfurter Bank, Signet Bank Maryland,
CoreStates Bank, N.A., Bank Hapoalim,
B.M., ABN AMRO Bank N.V., Credit
Lyonnais New York Branch, Meridian Bank,
Bank Leumi le-Israel, B.M. and Credit
Suisse (collectively, the "Banks"),
Comerica Bank, as agent for the Banks
(the "Agent"), and Vishay
Intertechnology, Inc. ("Vishay"), and
the Vishay Intertechnology, Inc.
$200,000,000 Acquisition Loan Agreement
dated as of July 18, 1994 by and among
the Banks, the Agent and Vishay.
Incorporated by references to Exhibit
10.4 to the 1995 Form 10-Q.
10.3 The First Amendment, dated June 27,
1995, to the Amended and Restated Vishay
Europe GmbH DM 40,000,000 Revolving
Credit and DM 9,506,000 Term Loan
Agreement dated as of July 18, 1994 by
and among the Banks, the Agent and
Vishay Europe GmbH ("VEG"), and the
Amended and Restated Roederstein DM
104,315,990.20 Term Loan Agreement dated
as of July 18, 1994 by and among the
Banks, the Agent and VEG. Incorporated
by references to Exhibit 10.5 to the
1995 Form 10-Q.
-30-
Page Number in
Exhibit sequentially
No. Description Numbered Copy
- ------- ----------- -------------
10.4 Amended and Restated Vishay
Intertechnology, Inc. $302,500,000
Revolving Credit and Term Loan
Agreement, dated as of July 18, 1994, by
and among Comerica Bank, NationsBank of
North Carolina, N.A., Berliner
Handelsund Frankfurter Bank, Signet Bank
Maryland, CoreStates Bank, N.A., Bank
Hapoalim, B.M., ABN AMRO Bank N.V.,
Credit Lyonnais New York Branch,
Meridian Bank, Bank Leumi le-Israel,
B.M. and Credit Suisse (collectively,
the "Former Banks"), Comerica Bank, as
agent for the Former Banks (the
"Agent"), and Vishay Intertechnology,
Inc. ("Vishay"). Incorporated by
reference to Exhibit (10.1) to the
Current Report on Form 8-K dated July
18, 1994.
10.5 Amended and Restated Vishay Beteiligungs
GmbH DM 40,000,000 Revolving Credit and
DM 9,506,000 Term Loan Agreement, dated
as of July 18, 1994, by and among the
Former Banks, the Agent and Vishay
Beteiligungs GmbH ("VBG"). Incorporated
by reference to Exhibit (10.2) to the
Current Report on Form 8-K dated July
18, 1994.
10.6 Amended and Restated Roederstein DM
104,315,990.20 Term Loan Agreement,
dated as of July 18, 1994, by and among
the Former Banks, the Agent, Vishay and
VBG. Incorporated by reference to
Exhibit (10.3) to the Current Report on
Form 8-K dated July 18, 1994.
10.7 Vishay Intertechnology, Inc.
$200,000,000 Acquisition Loan Agreement,
dated as of July 18, 1994, by and among
the Banks, the Agent and Vishay.
Incorporated by reference to Exhibit
(10.4) to the Current Report on Form 8-K
dated July 18, 1994.
-31-
Page Number in
Exhibit sequentially
No. Description Numbered Copy
- ------- ----------- -------------
10.8 Amended and Restated Guaranty by Vishay
to the Banks, dated July 18, 1994.
Incorporated by reference to Exhibit
(10.5) to the Current Report on Form 8-K
dated July 18, 1994.
10.9 Employment Agreement, dated as of March
15, 1985, between the Company and Dr.
Felix Zandman. Incorporated by reference
to Exhibit (10.12) to the Form S-2.
10.10 Vishay Intertechnology 1995 Stock Option
Program. Incorporated by reference to
the Company's Registration Statement on
Form S-8 (No. 33-59609).
10.11 1986 Employee Stock Plan of the Company.
Incorporated by reference to Exhibit 4
to the Company's Registration Statement
on Form S-8 (No. 33-7850).
10.12 1986 Employee Stock Plan of Dale
Electronics, Inc. Incorporated by
reference to Exhibit 4 to the Company's
Registration Statement on Form S-8 (No.
33-7851).
10.13 Money Purchase Plan Agreement of
Measurements Group, Inc. Incorporated by
reference to Exhibit 10(a)(6) to
Amendment No. 1 to the Company's
Registration Statement on Form S-7 (No.
2-69970).
22. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
-32-