-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DDwzhFs80jCZZDC+RV4kFOTfiTcP8lysNYRx9Ogbaff8fmfsKxpOKySHFS9k78lq 0dsM7TKiRtUDI7AmhITzrQ== 0000922423-96-000155.txt : 19960326 0000922423-96-000155.hdr.sgml : 19960326 ACCESSION NUMBER: 0000922423-96-000155 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960325 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VISHAY INTERTECHNOLOGY INC CENTRAL INDEX KEY: 0000103730 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 381686453 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07416 FILM NUMBER: 96538013 BUSINESS ADDRESS: STREET 1: 63 LINCOLN HWY CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 2156441300 MAIL ADDRESS: STREET 1: 63 LINCOLN HIGHWAY CITY: MALVERN STATE: PA ZIP: 19355 10-K 1 YEAR END REPORT 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 -2- 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, -3- 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 -4- 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, -5- 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, -7- 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. -8- 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 -9- 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. -10- 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 ------- 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. -11- 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. -12- 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 -13- 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- EX-22 2 COMPANY SUBSIDIARIES EXHIBIT 22 COMPANY SUBSIDIARIES Percent of Name Jurisdiction Equity* - ---- ------------ ------ Nikkohm Co. Ltd. Japan 49% Nippon Vishay, K.K. Japan 100% Vishay F.S.C., Inc. U.S. Virgin Islands 100% VSH Holdings, Inc. Delaware 100% Roederstein Electronics, Inc. Delaware 100% Measurements Group, Inc. Delaware 100% Vishay MicroMeasures SA France 100% Measurements Group GmbH Germany 100% Grupo Da Medidas Iberica S.L. Spain 100% Vishay Israel Limited Israel 100% Z.T.R. Electronics Ltd. Israel 100% Vishay International Trade Ltd. Israel 100% Dale Israel Electronics Industries, Ltd. Israel 100% Draloric Israel Ltd. Israel 100% V.I.E.C. Ltd. Israel 100% Vilna Equities Holding, B.V. Netherlands 100% Visra Electronics Financing B.V. Netherlands 100% Measurements Group (U.K.) Ltd. England & Wales 100% Vishay Europe GmbH Germany 66.6% by Vishay Israel 27.2% by Vishay 3.8% by Vilna 2.4% by Dale ______________________________ Note: Names of Subsidiaries are indented under name of Parent. * Certain Directors' or other shares required by statute in foreign jurisdictions and totalling less than 1% of equity are omitted. Percent of Name Jurisdiction Equity* - ---- ------------ ------ Roederstein GmbH Germany 100% Vitramon GmbH Germany 99% Roederstein-Produktionsgesellschaft GmbH Germany 100% Roederstein Electronics Portugal Lda. Portugal 100% Vishay Bauelemente Vertrieb GmbH Germany 78% Vishay Bauelemente Vertrieb A.G. Switzerland 100% Vishay Vertrieb Elektronischer Bauelemente Ges. mbH Austria 100% Klevestav-Roederstein Festigheter AB Sweden 50% Vishay Compenents, S.A. Spain 100% Dzie Roederstein Electronische Onderdelen B.V. Netherlands 40% N.V. Roederstein Electronics Components S.A. Belgium 100% Fabrin Roederstein A.S. Denmark 40% OY Roederstein AB Finland 40% Okab Roederstein Finland OY Finland 44.4% Rogin Electronic S.A. France 33% Roederstein Norge AS Norway 40% Roederstein-Hilfe-GmbH Germany 100% Draloric Electronic GmbH Germany 100% Draloric Electronic SPOL S RO Czech Republic 100% Vishay S.A. France 99.8% Nicolitch S.A. France 100% Gravures Industrielles Mulhousiennes S.A. France 100% Sfernice Ltd. England & Wales 100% Ultronix, Inc. Delaware 100% Ohmtek, Inc. New York 100% Techno Components Corp. Delaware 100% E-Sil Components Ltd. England & Wales 100% Vishay Components (U.K.) Ltd. England & Wales 100% Grued Corporation Inc. Delaware 100% Con-Gro, Corp. Delaware 100% Gro-Con, Inc. Delaware 100% Angstrohm Precision, Inc. Delaware 100% Angstrohm Holdings, Inc. Delaware 100% Alma Components Ltd. Guernsey 100% ___________________________ Note: Names of Subsidiaries are indented under name of Parent. * Certain Directors' or other shares required by statute in foreign jurisdictions and totalling less than 1% of equity are omitted. 2 Percent of Name Jurisdiction Equity* - ---- ------------ ------ Vishay Resistor Products (U.K.) Ltd. England & Wales 100% Heavybarter, Unlimited England & Wales 100% Vishay-Mann Limited England & Wales 100% Vitramon, Ltd England & Wales 100% Dale Holdings, Inc. Delaware 100% Dale Electronics, Inc. Delaware 100% Components Dale de Mexico S.A. de C.V. Mexico 100% Electronica Dale de Mexico S.A. de C.V. Mexico 100% Vishay Electronic Components Asia Pte., Ltd. Singapore 100% The Colbar Corporation New Jersey 100% Dale Test Laboratories, Inc. South Dakota 100% Angstrohm Precision, Inc. (Maryland) Maryland 100% Bradford Electronics, Inc. Delaware 100% Vishay Sprague Holdings Corp. Delaware 100% Sprague North Adams, Inc. Massachusetts 100% Sprague Sanford, Inc. Maine 100% Vishay Sprague, Inc. Delaware 100% Vishay Sprague Canada Holdings Inc. Canada 100% Sprague Electric of Canada Limited Canada 100% Sprague France S.A. France 100% Sprague Palm Beach, Inc. Delaware 100% Vishay Acquisition Holdings Corp. Delaware 100% Vitramon, Incorporated Delaware 100% Vitramon Pty. Limited Australia 100% Vitramon Japan Limited Japan 100% Vitramon do Brasil Ltda. Brazil 100% Vitramon Far East Pte. Ltd. Singapore 100% Vitramon GmbH Germany 1% ____________________________ Note: Names of Subsidiaries are indented under name of Parent. * Certain Directors' or other shares required by statute in foreign jurisdictions and totalling less than 1% of equity are omitted. 3 EX-23 3 CONSENT OF EXPERTS Exhibit 23 Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statements on Form S-8 of Vishay Intertechnology, Inc. and in the related Prospectuses of our report dated February 6, 1996, with respect to the consolidated financial statements of Vishay Intertechnology, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1995. REGISTRATION STATEMENT NUMBER DESCRIPTION - -------------------------------------------------------------------------------- 33-7850 1986 Employee Stock Plan of Vishay Intertechnology, Inc. 33-7851 1986 Employee Stock Plan of Dale Electronics, Inc. 33-59609 Vishay Intertechnology, Inc. 1995 Stock Option Program Philadelphia, Pennsylvania /s/ Ernst & Young LLP March 21, 1996 --------------------- EX-27 4 ART. 5 FDS AS PART OF A CT
5 1,000 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 19,584 0 187,298 (6,915) 362,192 640,198 922,976 (253,748) 1,543,331 228,912 0 0 0 5,114 902,739 1,543,331 1,224,416 1,224,416 902,518 902,518 169,491 0 29,433 122,974 30,307 92,667 0 0 0 92,667 1.71 1.71
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