EX-99 3 kl01020_ex99-3.txt EXHIBIT 99.3 PRO FORMA FINANCIAL INFORMATION Exhibit 99.3 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma condensed consolidated financial statements give pro forma effect to the merger using the purchase method of accounting and the assumptions and adjustments set forth in the accompanying notes to the pro forma financial statements. This presentation assumes the issuance of 21,298,140 shares of common stock of Vishay Intertechnology, Inc. ("Vishay"), valued at $23.46 per share, in connection with the acquisition of General Semiconductor, Inc. ("General Semiconductor"). The pro forma adjustments are based on a preliminary analysis, subject to change, of the fair values of the assets acquired and liabilities assumed. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2000 and the six months ended June 30, 2001 are based on the individual historical statements of operations of Vishay and General Semiconductor and combine the results of operations of Vishay and General Semiconductor for the year ended December 31, 2000 and the six months ended June 30, 2001, as if the merger had occurred as of January 1, 2000. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2001 is based on the individual historical balance sheets of Vishay and General Semiconductor and gives effect to the merger as if it had occurred on June 30, 2001. The unaudited pro forma condensed consolidated financial statements are based on estimates and assumptions. These estimates and assumptions are preliminary and have been made solely for purposes of developing this pro forma information. Unaudited pro forma consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial position or results of operations of future periods or the results that actually would have occurred had the merger occurred on the dates indicated. The pro forma consolidated financial information does not give effect to cost savings or post-merger integration costs that may result from the integration of Vishay's and General Semiconductor's businesses. This unaudited pro forma consolidated financial information is based upon the respective historical consolidated financial statements of Vishay and General Semiconductor and related notes thereto and should be read in conjunction with those statements and the related notes.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) June 30, 2001 As Reported June 30, -------------------------- Pro Forma 2001 Vishay Gen Semi Adjustments Pro Forma ---------- ----------- ----------- --------- (In thousands) ASSETS Cash and cash equivalents $ 451,728 $ 1,087 $ 452,815 Accounts receivable 388,766 49,988 438,754 Inventories 603,436 54,252 3,900 (B) 661,588 Deferred income taxes 31,203 11,872 14,511 (B) 57,586 Other current assets 146,269 11,511 157,780 ---------- --------- ----------- ----------- Total Current Assets 1,621,402 128,710 18,411 1,768,523 Property and equipment, net 964,486 254,785 (42,900) (B) 1,176,371 Goodwill 304,952 149,897 527,792 (B) 832,744 (149,897) (B) Other assets 40,928 47,770 (6,992) (B) 144,960 35,000 (B) 37,000 (B) (8,746) (B) ---------- --------- ---------- ----------- $2,931,768 $ 581,162 $ 409,668 $ 3,922,598 =========== ========= ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts and notes payable $ 81,557 $ 37,367 $0 118,924 Other current liabilities 256,665 40,952 7,466 (A) 305,083 Current portion of long-term debt 125 0 125 ---------- --------- ---------- ----------- Total Current Liabilities 338,347 78,319 7,466 424,132 Long-term debt 304,406 230,500 (2,150) (B) 532,756 Deferred income taxes 73,756 27,249 6,876 (B) 107,881 Deferred income 54,499 0 54,499 Minority interest 66,488 0 66,488 Other liabilities 94,012 27,195 35,954 (B) 157,161 Accrued pension costs 93,845 33,000 14,767 (B) 141,612 Stockholders' equity Common stock 12,243 379 2,130 (A) 14,373 (379) (B) Class B common stock 1,551 0 1,551 Capital in excess of par value 1,319,185 13,199 497,524 (A) 1,864,709 48,000 (A) (13,199) (B) Treasury stock 0 (7,371) 7,371 (B) 0 Retained earnings 708,707 178,692 (16,000) (B) 692,707 (178,692) (B) Accumulated other comprehensive loss (134,223) 0 (134,223) Unearned compensation (1,048) 0 (1,048) ---------- --------- ---------- ----------- Total stockholders' equity 1,906,415 184,899 346,755 2,438,069 ---------- --------- ---------- ----------- $2,931,768 $ 581,162 $ 409,668 $ 3,922,598 ========== ========= ========== ===========
See notes to pro forma condensed consolidated financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Year Ended December 31, 2000 Year Ended As Reported Pro Forma December 31, ---------------------------- Adjustments 2000 Vishay Gen Semi Note C Pro Forma ------------- ------------- ------------ ------------- (In thousands, except per share data) Net sales $ 2,465,066 $ 493,721 $ 0 $ 2,958,787 Costs of products sold 1,459,784 339,538 947 1,800,269 ----------- ----------- ----------- ----------- Gross profit 1,005,282 154,183 (947) 1,158,518 Selling, general, and administrative expenses 297,315 64,832 3,700 365,847 Amortization of goodwill 11,469 5,141 (5,141) 11,469 ----------- ----------- ----------- ----------- Operating income 696,498 84,210 494 781,202 Other income (expense): Interest expense (25,177) (18,756) (43,933) Other 18,904 (83) 18,821 ----------- ----------- ----------- ----------- (6,273) (18,839) 0 (25,112) ----------- ----------- ----------- ----------- Earnings before income taxes and minority interest 690,225 65,371 494 756,090 Income taxes 148,186 18,631 (331) 166,486 Minority Interest 24,175 0 24,175 ----------- ----------- ----------- ----------- Net earnings $ 517,864 $ 46,740 $ 825 $ 565,429 =========== =========== =========== =========== Basic earnings per share $ 3.83 $ 1.24 $ 3.61 (D) Diluted earnings per share $ 3.77 $ 1.08 $ 3.44 (D) Weighted average shares outstanding - basic 135,295 37,608 156,593 Weighted average shares outstanding - diluted 137,463 49,562 166,397
See notes to pro forma condensed consolidated financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Six Months Ended June 30, 2001 Six Months Ended As Reported Pro Forma June 30, ---------------------------- Adjustments 2001 Vishay Gen Semi Note C Pro Forma ------------- ------------- ------------ ------------- (In thousands, except per share data) Net sales $941,902 $186,035 $0 $1,127,937 Costs of products sold 641,997 138,901 474 781,372 ----------- ------------ ---------- ----------- Gross profit 299,905 47,134 (474) 346,565 Selling, general, and administrative expenses 136,409 30,071 1,850 168,330 Restructuring expense 35,276 12,948 48,224 Amortization of goodwill 5,667 2,571 (2,571) 5,667 ----------- ------------ ---------- ----------- Operating income 122,553 1,544 247 124,344 Other income (expense): Interest expense (6,949) (7,832) (14,781) Other 12,564 176 12,740 ----------- ------------ ---------- ----------- 5,615 (7,656) 0 (2,041) ----------- ------------ ---------- ----------- Earnings before income taxes and minority interest 128,168 (6,112) 247 122,303 Income taxes 31,085 (1,833) (166) 29,086 Minority Interest 3,831 0 3,831 ----------- ------------ ---------- ----------- Net earnings $93,252 ($4,279) $413 $89,386 =========== ============ ========== =========== Basic earnings per share $0.68 ($0.11) $0.56 (D) Diluted earnings per share $0.67 ($0.11) $0.55 (D) Weighted average shares outstanding - basic 137,700 37,752 158,999 Weighted average shares outstanding - diluted 140,433 37,752 168,305
See notes to pro forma condensed consolidated financial statements. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE DATA) (A) Pro forma adjustments to record the merger as of June 30, 2001 reflect the following: - the exchange of 0.563 of a share of Vishay common stock for each of 37,829,734 outstanding shares of General Semiconductor common stock. The 21,298,140 shares of Vishay common stock issued in the merger were valued based on a price per share of $23.46, which is the average market price of the Vishay common stock for the seven-day period beginning three days before the date the merger was announced; - an increase in equity of $48 million relating to the issuance of options to purchase 4,240,660 shares of Vishay common stock in exchange for all of the 7,532,256 outstanding options to purchase shares of General Semiconductor common stock, based on a value per share of Vishay common stock of $23.46, calculated using the Black-Scholes option pricing model; - an increase in accrued expenses of approximately $7 million relating to estimated transaction costs incurred by Vishay in connection with the merger; The purchase price and related costs for the acquisition of General Semiconductor are as follows: Purchase price ........................................................$499,654 Stock option issuance................................................... 48,000 Professional fees and other costs ...................................... 7,466 -------- Total purchase price $555,120 (B) Under purchase accounting, the total purchase price is allocated to assets acquired and liabilities assumed based on their estimated fair values. The allocation of the purchase price is based on a preliminary evaluation by Vishay management of the fair value of General Semiconductor's tangible and identifiable intangible assets acquired and liabilities assumed at the date of the merger based upon currently available information. There can be no assurance that the estimated adjustments represent the final purchase accounting adjustments that will ultimately be determined. The following pro forma adjustments have been made to reflect the estimated fair values of the acquired assets and liabilities as of November 2, 2001. Net Assets ------------------ Increase (Decrease) Inventories...................................................... 3,900 Property and equipment, net ..................................... (42,900) Trademarks....................................................... 35,000 Completed technology............................................. 37,000 Reduction of retained earnings for in process research and development................................................ (16,000) Elimination of General Semiconductor intangible assets........... (8,746) Elimination of deferred costs.................................... (6,992) Estimated restructuring costs.................................... (35,954) Deferred income taxes Other current assets......................................... 14,511 Other non-current liabilities ............................... (6,876) Estimated pension costs.......................................... (14,767) Fair market value of debentures.................................. 2,150 Elimination of General Semiconductor goodwill ................... (149,897) Elimination of General Semiconductor stockholders' equity ....... (184,899) Cost in excess of net assets acquired ........................... 527,792 (C) For purposes of determining the pro forma effect of the General Semiconductor acquisition on Vishay's consolidated statement of operations, the following estimated pro forma adjustments have been made:
Increase (Decrease) Income Increase (Decrease) Income Year Ended Six Months Ended 12/31/2000 6/30/01 1. Increase in depreciation resulting from adjustments to fair value of property, plant and equipment and the establishment by Vishay of estimated remaining useful lives.............................. $ (947) $ (474) 2. Elimination of amortization of General Semiconductor goodwill............. 5,141 2,571 3. Amortization of completed technology costs over a ten-year period............................. (3,700) (1,850) 4. Income tax expense applicable to adjustments at a 35% assumed rate........................ 331 166 -------- ------- $ 825 $ 413 -------- -------
Under Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests. Vishay is required to adopt this new standard effective January 1, 2002, except that the new rules are effective for any business combination completed after June 30, 2001. The pro forma financial statements, therefore, do not reflect any amortization expense relating to the goodwill arising from the acquisition of General Semiconductor. Beginning January 1, 2002, Vishay will no longer record amortization on its pre-existing goodwill, but no adjustment for this has been reflected in the pro forma presentation. (D) The following table sets forth the computation of basic and diluted earnings per share (in thousands, except earnings per share): Year Ended Six Months Ended December 31, June 30, 2000 2001 ------------ --------------- Numerator: Net income $ 565,429 $ 89,386 Denominator for basic earnings per share: Weighted average shares 156,593 158,999 Effect of dilutive securities: Other 337 162 Employee stock options 3,201 1,482 Convertible debentures 6,266 7,662 --------- --------- Dilutive potential common shares 9,804 9,306 Denominator for diluted earnings per share: Adjusted weighted average shares 166,397 168,305 Basic earnings per share $3.61 $0.56 ============ ========== Diluted earnings per share $3.44 $0.55 ============ ========== Pro forma earnings per share have been adjusted to reflect the issuance of additional shares of Vishay common stock in the merger, based on General Semiconductor's historical weighted average shares outstanding for the periods presented and an exchange ratio of 0.563 of a share of Vishay common stock to one share of General Semiconductor common stock. Diluted pro forma earnings per share reflect the dilutive effect of General Semiconductor stock options that, following the merger, became exercisable for Vishay common stock and the dilutive effect of the assumed conversion of the 5.75% Convertible Subordinated Notes due 2006 of General Semiconductor into Vishay common stock.