-----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, VC9uNGjcwkRhXqGO/90H1wRHm0N2iTWlIkLhItb+T2grTGNnLLR9fntaDk/8K6kR JIe1nbWvO3CnEtX9RuYkbg== 0000922423-98-000506.txt : 19980518 0000922423-98-000506.hdr.sgml : 19980518 ACCESSION NUMBER: 0000922423-98-000506 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980302 ITEM INFORMATION: FILED AS OF DATE: 19980515 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: 8-K/A SEC ACT: SEC FILE NUMBER: 001-07416 FILM NUMBER: 98625005 BUSINESS ADDRESS: STREET 1: 63 LINCOLN HWY CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6106441300 MAIL ADDRESS: STREET 1: 63 LINCOLN HIGHWAY CITY: MALVERN STATE: PA ZIP: 19355 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM 8-K/A AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported): March 2, 1998 ---------- VISHAY INTERTECHNOLOGY, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-7416 38-168645 3 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 63 Lincoln Highway, Malvern, PA 19355 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (610) 644-1300 Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) This Form 8-K/A amends the Form 8-K filed on March 17, 1998. The following items have been amended: Item 7.Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statement of business acquired. Set forth on pages 1 through 24 are the financial statements of the business acquired, required to be set forth in the Registrant's Current Report on Form 8-K, dated March 17, 1998, which report is hereby amended. The following are included: Independent Auditors' Report. Combined Balance Sheet -- December 31, 1997. Combined Statement of Revenues and Expenses for the year ended December 31, 1997. Combined Statement of Cash Flow for the year ended December 31, 1997. Notes to Combined Financial Statements. (b) Pro Forma Financial Information. Set forth on pages 25 through 29 is pro forma financial information required to be set forth in the Registrant's Current Report on Form 8-K, dated March 17, 1998, which report is hereby amended. The following are included: Pro Forma Condensed Consolidated Balance Sheet (Unaudited) -- December 31, 1997. Pro Forma Condensed Consolidated Statement of Operations (Unaudited) -- Year ended December 31, 1997. Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited). (c) Exhibits. 23 -- Consent of Independent Accountants. INDEPENDENT AUDITORS' REPORT To the Stockholders of the TEMIC Semiconductor Business We have audited the accompanying combined balance sheet of the TEMIC Semiconductor Business ("TEMIC") of Daimler-Benz Aktiengesellschaft (as described in Note 1 to the combined financial statements) as of December 31, 1997, and the related combined statements of revenues and expenses and cash flow for the year then ended. These combined financial statements are the responsibility of TEMIC's management. Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Germany and the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of TEMIC as of December 31, 1997 and the result of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles in Germany. Generally accepted accounting principles in Germany vary in certain significant respects from generally accepted accounting principles in the United States (U.S. GAAP). Application of generally accepted accounting principles in the United States would have affected the results of operations for the year ended December 31, 1997 and equity as of December 31, 1997, to the extent summarized in Note 2 to the combined financial statements. KPMG DEUTSCHE TREUHAND-GESELLSCHAFT AG Stuttgart, Germany May 14, 1998 TEMIC SEMICONDUCTOR BUSINESS COMBINED BALANCE SHEET DECEMBER 31, 1997 (IN THOUSANDS OF DEUTSCHE MARKS)
A. FIXED ASSETS I. Intangible Assets 1. Concessions, industrial and similar rights and assets and licenses in such rights and assets 21,418 2. Software 13,044 3. Goodwill 312 ---------------- 34,774 ---------------- II. Tangible Assets 1. Land, leasehold rights and buildings including buildings on third party land 133,235 2. Technical equipment and machines 347,469 3. Other equipment, factory and office equipment 42,238 4. Payments on account and assets under construction 42,279 ---------------- 565,221 ---------------- III. Financial Assets 1. Shares in affiliated companies 945 2. Loans to affiliated companies 604 3. Shares in associated companies 19,512 4. Securities 3,221 5. Other loans 233 ---------------- 24,515 ---------------- B. CURRENT ASSETS I. Inventories 1. Raw materials and supplies 53,374 2. Work-in-process 134,520 3. Finished goods and goods purchased for resale 79,560 4. Advance payments on inventories and assets under construction 6,629 ---------------- 274,083 ---------------- II. Receivables and other assets 1. Trade receivables 288,528 2. Receivables from affiliated companies 26,221 3. Receivables from enterprises in which participating interests are held 1,746 4. Other assets 60,261 ---------------- 376,756 ---------------- IV. Cheques, cash-in-hand, bank balances 33,540 ---------------- C. PREPAID EXPENSES 3,192 ================ 1,312,081 ================ 2 TEMIC SEMICONDUCTOR BUSINESS COMBINED BALANCE SHEET DECEMBER 31, 1997 (IN THOUSANDS OF DEUTSCHE MARKS) A. EQUITY I. Subscribed capital 80,000 II. Capital reserves 138,463 III. Accumulated deficit (19,997) IV. Minority interests: Daimler-Benz Group 215,260 Other 66,600 ----------------- 480,326 ----------------- B. ACCRUALS 1. Accruals for pensions and similar obligations 84,557 2. Tax accruals 19,872 3. Other accruals 122,771 ----------------- 227,200 ----------------- C. LIABILITIES 1. Bank borrowings 163,769 2. Payments received on account of orders 270 3. Trade payables 129,705 4. Liabilities on bills accepted and drawn 5,669 5. Payables to affiliated companies 208,626 6. Payables to enterprises in which participating interests are held 940 7. Other liabilities 95,576 ----------------- 604,555 ================= 1,312,081 =================
3 TEMIC SEMICONDUCTOR BUSINESS COMBINED STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS OF DEUTSCHE MARKS)
SALES 1,530,965 Cost of sales (1,140,976) Research and development cost (121,480) ----------------- GROSS MARGIN 268,509 ----------------- Selling expenses (203,202) General administration expenses (53,048) Other operating income 28,272 Other operating expense (15,021) ----------------- (242,999) ----------------- Loss from participations (487) Net other financial income (expense) (61) Net interest income (expense) (14,830) ----------------- NET FINANCIAL INCOME (EXPENSE) (15,378) RESULTS FROM ORDINARY ACTIVITIES 10,132 Extraordinary income 16,817 Income taxes (11,420) NET INCOME BEFORE MINORITY INTEREST 15,529 ================ Accumulated deficit - beginning of the year (2) Minority interests in net earnings/ losses of subsidiaries: Daimler-Benz Group (Note 1) (50,865) Other (421) Releases from/transfers to reserves 13,735 Currency conversion differences 2,027 ================= ACCUMULATED DEFICIT - END OF THE YEAR (19,997) =================
4 TEMIC SEMICONDUCTOR BUSINESS COMBINED STATEMENT OF CASH FLOW FOR THE YEAR ENEDED DECEMBER 31, 1997 (IN THOUSANDS OF DEUTSCHE MARKS)
CASH FLOWS FROM OPERATING ACTIVITIES Net income (German GAAP) 15,529 Extraordinary income (16,817) Depreciation and amortization 151,950 Increase in pension accruals 9,361 Loss on disposals of assets 1,753 Increase in inventories, trade receivables and other assets (50,481) Increase in trade payables and other liabilities 29,800 ----------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 141,095 ----------------- CASH FLOWS FROM INVESTING ACTIVITIES Disposals of fixed assets 25,817 Purchases of fixed assets (207,312) Cash from first year consolidations 411 ----------------- NET CASH USED IN INVESTING ACTIVITIES (181,084) ----------------- CASH FLOWS FROM FINANCING ACTIVITIES Reduction in bank loans (31,417) Increase in other loans from Daimler-Benz Group 28,457 Capital contribution 16,817 Other equity transactions 8,149 ----------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 22,006 ----------------- Effects of foreign exchange rate changes on cash 1,891 ----------------- Net decrease in cash (16,092) Cash at beginning of year 49,632 ================= CASH BALANCE AT END OF YEAR 33,540 ================= Supplemental disclosure of cash flow information Interest paid 18,638 Income taxes paid 6,750
5 TEMIC SEMICONDUCTOR BUSINESS NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 1997 (ALL AMOUNTS IN THOUSANDS OF DEUTSCHE MARKS (KDM) UNLESS OTHERWISE STATED) BACKGROUND The TEMIC Semiconductor Business ("TEMIC") comprises the following indirectly majority owned entities of Daimler-Benz AG: O TEMIC Semiconductor GmbH, Heilbronn, Germany ("TSG"), and subsidiaries ("German Group") O Siliconix Incorporated, Santa Clara, USA, and subsidiaries ("Siliconix Group") 0 Dialogue Semiconductors Ltd., Swindon, UK, and subsidiaries ("Dialogue Group") Vishay Intertechnology, Inc. ("Vishay") of Malvern, Pennsylvania, USA and certain subsidiaries have entered into a stock purchase agreement on the acquisition of the TEMIC Semiconductor Business. The effective date for the acquisition was February 28, 1998. Ericsson Radio Systems AB ("Ericsson"), a minority shareholder of Dialogue Semiconductor Limited, Swindon, UK ("Dialogue"), on February 23, 1998 exercised a call option on the shares of Dialogue. The transaction with Ericsson occurred subsequent to the purchase of TEMIC by Vishay. However, the Dialogue Group has been included in the combined financial statements of the TEMIC Semiconductor Business as of December 31, 1997. The net assets of the Dialogue Group under German generally accepted accounting principles ("GAAP") were KDM 6,763 as of December 31, 1997. The revenues in 1997 were KDM 75,352 and net income under German GAAP was KDM 4, 115. Additionally, Vishay has subsequently entered into a Share Sale and Transfer Agreement with ATMEL Corporation, San Jose, USA ("ATMEL"). Vishay has agreed to sell the integrated circuit division ("IC-Business") (which was part of the acquired Semiconductor Business) to ATMEL. This transaction, once legally effective, will become economically effective as of February 28, 1998. The combined financial statements have been prepared under the assumption that none of the above two sales would result in significant changes in the basis of valuation. Therefore, any influences which could occur out of the two sales have not been considered. 6 The Directors of TSG exercised a call option to acquire the remaining 50 % of the issued share capital of Matra MHS S.A., Nantes, France ("Matra MHS")for a price of 1 French Franc with written notice dated December 30, 1997. According to the contractual agreement, the shares may only be transferred at the earliest after 60 days have elapsed since the option was exercised. Matra MHS has recognized as revenue grants from the French Government totally approximately French Francs 497 millions as of December 31, 1997. There is a provision in the grant agreements that provides that the grants may be required to be refunded to the French Government upon certain changes in ownership of Matra MHS. The sale and the transfer of the shares of Matra MHS to Vishay and ATMEL could result in the French Government requesting repayment of all or part of these grants. The ultimate resolution of this matter can not be determined at this time. 7 1. DISCLOSURES TO THE FINANCIAL STATEMENTS UNDER GERMAN GAAP The combined financial statements of TEMIC have been prepared in accordance with the regulations of the German Commercial Code (HGB) under the assumption that TSG is the parent entity. COMBINED COMPANIES The combined financial statements include all semiconductor companies which are subsidiaries of TSG in accordance with Section 290 of the German Commercial Code as well as subsidiaries of the Daimler-Benz Group that are industrially managed (Siliconix Group and Dialogue Group). Significant investments in which TEMIC has an ownership interest in the range of 20 % to 50 % ("associated companies") are generally included using the equity method of accounting. The combined financial statements of TEMIC include the following companies: O TEMIC Semiconductor GmbH, Heilbronn/Germany, (until September 30, 1997 legally dependent part of TEMIC TELEFUNKEN microelectronic Gmbh, Heilbronn/Germany) and the following subsidiaries O TEMIC Semiconductors Itzehoe GmbH, Itzehoe/Germany O TEMIC TELEFUNKEN microelectronic Ges.m.b.H., Vocklabruck/Austria O TEMIC Semiconductors (Philippines) Inc., Manila/Philippines, (in 1997 legally dependent part of TEMIC TELEFUNKEN microelectronic (Philippines) Inc., Manila/Philippines) O Shanghai TEMIC Opto Semiconductors Company Ltd., Shanghai/China O Shanghai TEMIC Discrete Semiconductors Company Ltd., Shanghai/China O Matra MHS S.A., Nantes/France. Dialogue Semiconductors Ltd., Swindon/Great Britain, and the following subsidiaries: O Dialog Semiconductor GmbH, Kirchheim-Teck/Germany O Dialog Semiconductor Ltd., Swindon/Great Britain. SiliconixInc., Santa Clara, USA, and the following subsidiaries: O Siliconix Ltd., Bracknell/Great Britain O Siliconix (Hong Kong) Ltd., Hong Kong/China O Siliconix Technology C.V., Amsterdam/Netherlands O TEMIC (S) Pte. Ltd., Singapore O TEMIC Japan KK, Tokyo/Japan O Siliconix (Taiwan) Ltd., Kaohsiung/Taiwan 0 TEMIC North America Inc., Basking Ridge/USA. 8 Prior to October 1, 1997 TEMIC Semiconductor GmbH was not a separate entity and therefore the net assets as well as the income and expenses had to be extracted from the financial statements of TEMIC TELEFUNKEN microelectronic GmbH ("TEMIC Gmbh"). The preparation of the combined financial statements require management to make estimates and assumptions that effect the recorded balances. TEMIC Semiconductors (Phils.) Inc., Manila ("TSP") was founded in September 1997 and its respective financial statements are included as of December 31, 1997. Prior to that date the semiconductor segment of TEMIC TELEFUNKEN microelectronics (Phils.) Inc., Manila ("TMP") was not a separate entity. The Siliconix Group and the Dialogue Group are included in the combined financial statements using the combined method, whereby the equity is shown under minority interests of the Daimler-Benz Group because the shares are not owned by TSG. All assets and liabilities of Matra MHS are fully included in the combined financial statements as of December 31, 1997. One half of the net assets are included within equity and the remaining 50 % are included within minority interests (Other). Shanghai SIMCONIX Electronic Company Limited, Shanghai, China, has been included in the combined financial statements using the equity method of accounting (Exhibit 3). Due to their insignificance with respect to the financial and earnings position eleven subsidiaries have not been included in the combined financial statements in accordance with Section 296 Paragraph 2 German Commercial Code (Exhibit 2). PRINCIPLES OF COMBINATION The equity combination of the group is performed according to the book value method as prescribed by German accounting standards. The carrying value of the shares owned by the parent company is eliminated against the amount which these shares represent in the equity of the subsidiary company. The elimination is based on the values at the time of acquisition of shares or first combination of the subsidiary in the combined financial statements. 9 The combined subsidiaries' equity amounts related to shares not owned directly or indirectly by TSG are disclosed as minority interests. Investments in associated companies are carried in the combined balance sheet at an amount which corresponds to the proportionate share of the associated company's net equity. Intercompany balance sheet and income statement balances and transactions have been eliminated in combination. METHODS OF ACCOUNTING AND VALUATION The financial statements of the combined companies have generally been prepared in accordance with the same methods of accounting and valuation for the entire Group. In accordance with Section 312 paragraph 5 German Commercial Code the accounting and valuation principles of Shanghia SIMCONIX Electronic Company Ltd., an associated company which is included in the combined financial statements using the equity method, have not been adjusted to the accounting and valuation principles used in the combined financial statements. Intangible assets acquired are stated at cost and are depreciated straight line with useful lives between 4 and 5 years. Property and equipment are stated at acquisition or manufacturing cost. Depreciation is based on the underlying -- and permitted for tax purposes -- useful economic lives of the assets. When applying the accelerated method, a changeover to the straight-line method occurs when higher depreciation expense results using this method. At the German companies, in calculating depreciation on movable fixed assets, an entire year's depreciation is charged to additions recorded during the first half of the year and a half year's depreciation is charged to additions made in the second half of the year. Low-value assets with an individual purchase price of up to DM 800 are fully depreciated in the year of purchase and are disclosed as disposal. The following useful lives and depreciation rates are used in calculating ordinary depreciation:
Useful life (years) Depreciation method ------------------------ --------------------------------- Additions to buildings up to 12.31.1988 40 straight line Additions to buildings after 12.31.1988 25 straight line Technical equipment and machinery 7-10 accelerated, straight line EDP equipment and vehicle fleet 4 straight line Tools 2 straight line Factory and office equipment 6-7 straight line
10 Investments in non-consolidated subsidiaries and participations and marketable securities are carried at cost or at a lower value appropriate at the balance sheet date. Investments in associated companies are accounted for at equity. Other long-term investments are carried at acquisition cost. Other loans which are low- or non-interest bearing are stated at their present value. Inventory is valued at the lower of acquisition or manufacturing cost or market, cost being generally determined on the basis of an average or first-in, first-out method. Manufacturing costs comprise direct material and labor and applicable manufacturing overheads, including depreciation charges. Raw materials are valued at average cost. Obsolescence risks have been accounted for. Unfinished and finished goods are valued at manufacturing costs. Such manufacturing costs include direct material, material related overhead, direct labor costs, labor related overhead and related depreciation of property, plant and equipment. Appropriate reserves have been recorded for obsolete or slow moving items. Receivables and other assets are recorded at face value less write downs or allowances. All known risks have been accounted for. In addition to the specific allowance for bad debts a general allowance of 1% has been recorded on domestic receivables in accordance with German tax regulations. Outside of Germany the general allowance is recorded based on past experience. Non interest bearing and low interest bearing receivables due after more than one year are reported at present values. Receivables denominated in foreign currencies are stated at the lower of the rate in effect at the date the receivable was recorded or the rate in effect at the balance sheet date. The accruals for pension and similar obligations are stated using the values derived from actuarial appraisals in accordance with Section 6 a German Income Tax Law using a discount rate of 6%. An accrued liability for taxes and other contingencies is recorded when an obligation with third parties has been incurred, its utilization is probable and the amount can be reasonably estimated. Liabilities are recorded at face value. Liabilities in foreign currency are stated at the rate in effect at the date the liability was recorded or at the higher rate in effect at the balance sheet date. 11 FOREIGN CURRENCY TRANSLATION Assets and liabilities reported by foreign subsidiaries have been translated into Deutsche Marks using the exchange rate in effect at the balance sheet date. Translation differences in the balance sheet between the years resulting from translation at different exchange rates are recorded in capital reserves. Revenues, expenses and net income/loss for the year have been translated into Deutsche Marks using average exchange rates. The resulting translation difference is recorded in capital reserves. DISCLOSURES TO THE COMBINED BALANCE SHEET FIXED ASSETS See Exhibit 1 for details of the development of fixed assets in 1997. The depreciation for the year includes extraordinary depreciation in the amount of KDM 3,498. Details of financial investments are given in Exhibit 2 and 3. RECEIVABLES Receivables from affiliated companies comprise trade receivables of KDM 9,218 and receivables from intercompany financing of KDM 17,003. Trade receivables and receivables from affiliated companies include receivables due from shareholders of KDM 16,549 and of KDM 4,200, respectively. The receivables are due within one year except for an amount of KDM 7,000 included in other assets which is due in more than one year. SUBSCRIBED CAPITAL The subscribed capital only comprises the capital of TSG. 12 MINORITY INTERESTS The minority interests of Daimler-Benz Group comprise subsidiaries of Daimler-Benz Group that are industrially managed and include interests in Dialogue Group and Siliconix Group. Other minority interests include interests in Dialogue Group, Siliconix Group, Matra MHS and Shanghai TEMIC Opto Semiconductors Company Limited, which are not owned by any company of the Daimler-Benz Group. ACCRUALS Other Accruals mainly include provisions for sales deductions and bonuses, royalties, warranty obligations, accrued losses on uncompleted contracts, termination pay, commissions and vacation pay. LIABILITIES Breakdown of the individual liability positions according to their maturity:
Total Maturity -------------- ------------------------------------------------- 5 years within 1 year 1 to 5 years and more -------------- --------------- --------------- --------------- 1. Bank borrowings 163,769 61,580 100,981 1,208 2. Payments received on account of orders 270 270 0 0 3. Trade payables 129,705 129,260 445 0 4. Liabilities on bills accepted and drawn 5,669 5,669 0 0 5. Payables to affiliated companies 208,626 208,204 422 0 thereof to shareholders 10,200 10,200 6. Payables to enterprises in which participating interests are held 940 940 0 0 7. Other liabilities 95,576 88,801 1,189 5,586 thereof for taxes 5,226 5,226 thereof for social security 8,061 8,061 thereof to shareholders 987 987 -------------- --------------- --------------- --------------- 604,555 494,724 103,037 6,794 ============== =============== =============== ===============
13 The payables to affiliated companies comprise trade accounts payable of KDM 14,380 and payables from intercompany financing of KDM 194,246. Of the bank borrowings, an amount of KDM 3,232 is secured by a mortgage on real estate. An amount of KDM 23,451 is secured through an assignment of assets. OTHER FINANCIAL OBLIGATIONS The other financial obligations from existing leasing and rent contracts amount to KDM 188,187. DISCLOSURES TO THE COMBINED PROFIT AND LOSS STATEMENT SALES
(KDM) % ---------------- ----------------- CLASSIFICATION BY BUSINESS SEGMENT IC Division 617,948 40.4 % Discrete Division 913,017 59.6 % ---------------- 1,530,965 ================ CLASSIFICATION BY GEOGRAPHICAL AREA Domestic (Germany) 272,355 17.8 % European Community (excluding Germany) 441,892 28.9 % Rest of Europe 18,192 1.2 % United States of America 320,433 20.9 % Africa 2,894 0.2 % Japan 84,115 5.5 % South-East Asia 350,686 22.9 % Rest of the world 40,398 2.6 % ---------------- 1,530,965 ================
14
COST OF MATERIALS (KDM) ----------------- a) Cost of raw materials and supplies and of purchased merchandise 349,023 b) Cost of purchased services 217,834 ================= 566,857 ================= PERSONNEL EXPENSES (KDM) ----------------- a) Wages and salaries 387,389 b) Social security and other pension cost thereof pension cost: KDM 17,124 107,188 ================= 494,577 ================= INTEREST EXPENSES This position subdivides as follows: (KDM) ----------------- Interest expenses (18,638) thereof to affiliated companies: KDM 10,101 Interest income 3,551 thereof from affiliated companies: KDM 1,137 Income from other investments and long-term loans 257 ================= (14,830) =================
EXTRAORDINARY INCOME Disclosed as extraordinary income is a contribution by TEMIC GmbH to compensate for the losses of the German semiconductor business from the period January 1, 1997 through September 30, 1997. 15 OTHER TAXES Other taxes amount to KDM 11,288. Thereof KDM 8,896 are included in cost of sales, mainly net assets tax (KDM 4,742) and property tax (KDM 2,558). OTHER NOTES EMPLOYEES
AVERAGE NUMBER OF EMPLOYEES DURING 1997 Waged Employees 4,354 Salaried Employees 2,613 Trainees 97 ================= 7,064 ================= NUMBER OF EMPLOYEES AT BALANCE SHEET DATE Waged Employees 4,311 Salaried Employees 2,735 Trainees 122 ================= 7,168 =================
NOTES TO THE ORGANIZATION AND PARENT COMPANY (TSG) The Management of TSG includes the following: Dr. Michael Muhlbayer Hans-Ulrich Staiger The Supervisory Board of TSG includes the following: Dr. Eckhard Cordes Peter Conze Cvetka Ivanovic Dr. Wolfgang Scholz Frank Dieter Maier Dieter Schulze Management remuneration paid by TSG amounted to KDM 91 in 1997. In the period from January 1 to September 30, 1997, while TSG was a legal dependent part of TEMIC Gmbh, there have been allocations for management remuneration amounting to KDM 273. Remuneration of the Supervisory Board of TSG for the period from September 18 to December 31, 1997 amounted to KDM 40. 16 As at December 31, 1997 the pension accruals included KDM 2,105 for former members of the management board. Pensions paid to former management amount to KDM 166. As at December 31, 1997 TSG was fully owned by TEMIC GmbH which in turn is directly or indirectly majority owned by Daimler-Benz AG, Stuttgart. Dialouge was majority owned by TEMIC GmbH, Siliconix was indirectly majority owned by Daimler-Benz AG. TSG, TEMIC GmbH, Siliconix and Dialogue Group are included in the consolidated financial statements of Daimler-Benz AG. These are published at the commercial register of the municipal court in Stuttgart (HRB 15350). 17 2. RECONCILIATION TO U.S. GAAP The accompanying combined financial statements have been prepared in conformity with accounting principles generally accepted in Germany. Those principles differ from accounting principles generally accepted in the United States of America. Following are the significant differences relating to the Company's combined financial statements: a) Capital contribution The amount disclosed as capital contribution equals the losses incurred by the German TEMIC semiconductor division in the period January 1, through September 30, 1997. The net loss was assumed by the parent company. In the German GAAP financial statements the loss assumed by the parent company is disclosed as extraordinary income while under U.S. GAAP the contribution is disclosed as a capital contribution. b) Deferred taxes The deferred tax asset in accordance with FAS 109 has been recognized on temporary differences and on available tax loss carry forwards to the extent that a future realization appears more likely than not. In the German GAAP financial statements no material deferred tax asset was recognized. c) Investments in Affiliated Companies Under German GAAP certain investments in affiliated companies are stated at cost. Under U.S. GAAP these investments are accounted for on the equity method. d) Accrued losses on uncompleted contracts The reserve comprises (for German purposes) the difference between cost (including administration and selling overhead cost) and anticipated net sales prices for accepted customer orders. For U.S. purposes selling and administration as well as research and development overhead cost have been eliminated in calculating the accrual. 18 e) Unrealized Exchange Gains Under German GAAP receivables denominated in foreign currency are recorded at the lower of the rate in effect at the date the receivable was recorded or the rate in effect at the balance sheet date. Liabilities are recorded at the higher of rate at the date the liability was recorded or the rate in effect at the balance sheet date. Under U.S. GAAP the year end rate has to be used. f) Pensions The Company has various pension plans including a major pension scheme of TSG. U.S. GAAP requires that future salary increases and cost of living increases be included in the actuarial assumptions. This results in a higher accrual for U.S. GAAP than according to German GAAP. The pension liability in accordance with FAS 87 "Employers' Accounting For Pensions" is as follows: German GAAP U.S. GAAP (KDM) (KDM) ------------------------------------- Accrued pension cost 84,557 98,847 Net periodic pension expense 17,124 16,251 g) Inventories The recorded GAAP difference on inventory represents the difference between the reserve for lower of cost or market calculated in accordance with German GAAP ("verlustfreie Bewertung") and U.S. GAAP respectively. For the German reserve the difference between cost and market was calculated by comparing the net sales prices with the cost plus (direct and indirect) selling and administration cost. In accordance with U.S. GAAP indirect selling and administration cost were not considered in calculating the reserve. 19 h) Termination Pay Reserve The difference relates to the termination pay reserve of the Austrian subsidiary of TSG. Employees are entitled under Austrian labor legislation to such termination payments either on their retirement or involuntary termination of their employment. The termination pay entitlement commences after three years of employment and increases in steps over the employee's period of service. The provision for employees' termination pay entitlements for U.S. GAAP reporting purposes includes the effect of future salary increases. i) Net Income in Accordance with U.S. GAAP
1997 (KDM) ----------------- German GAAP net income 15,529 Other minority interests other than Daimler-Benz Group in net results of combined entities (421) ----------------- German GAAP net income excluding other minority interests other than Daimler-Benz Group in net results of combined entities 15,108 ----------------- Capital contribution (16,817) Deferred taxes 10,985 Investments in affiliated companies 3,677 Accrued losses on uncompleted contracts 1,459 Unrealized exchange gains 1,193 Pension expense 873 Inventories 373 Termination pay reserve (131) Other 109 ----------------- Net decrease of reported net income 1,721 ----------------- Other minority interests other than Daimler-Benz Group in net decrease of reported net income (873) ----------------- Approximate net income in accordance with U.S. GAAP 15,956 =================
20 j) Reconciliation of German GAAP Equity to U.S. GAAP Equity
12-31-1997 (KDM) ----------------- Equity as reported in the German GAAP combined balance sheet 480,326 Other minority interests other than Daimler-Benz Group in equity of combined entities (66,600) ----------------- German GAAP net equity excluding other minority interests other than Daimler-Benz Group in equity of combined entities 413,726 ----------------- Deferred taxes 25,227 Investments in affiliated companies 342 Accrued losses on uncompleted contacts 4,878 Unrealized exchange gains 2,424 Pension reserve (14,290) Inventories 692 Termination pay reserve (2,422) Other 950 ----------------- Net decrease of reported net equity 17,801 ----------------- Other minority interests other than Daimler-Benz Group in net decrease of reported net equity (1,998) ----------------- Approximate equity in accordance with U.S. GAAP 429,529 =================
Heilbronn, May 14, 1998 The Management 21
Statement of Movements of Fixed Assets TEMIC Semiconductor Business (German GAAP) Exhibit 1 - ------------------------------------------------------------------------------------------------------------------------------ (in DM 000) Acquisition and Production Costs ------------------------------------------------------------------------------ Balance on Currency Balance on 1//1/97 effect Additions Transfers Disposals 12/31/97 ------------- -------------- ------------ ------------ ----------------------- Intangible assets Concessions, industrial and similar rigths and assets and licences and licences in such rights and assets 43,196 303 11,103 0 4,420 50,182 Software 55,081 1,202 3,887 728 9,476 51,422 Goodwill 0 0 390 0 0 390 ------------- -------------- ------------ ------------ ----------------------- 98,277 1,505 15,380 728 13,896 101,994 ............. .............. ............ ............ ....................... Tangible assets Land, leasehold rights and buildings including buildings on third party land 259,659 10,178 11,970 9,350 3,035 288,122 Technical equipment and machines 1,056,712 21,541 67,361 97,375 63,767 1,179,222 Other equipment, factory and ofiice equipment 159,975 919 17,179 8,808 14,366 172,515 Payments on account and assets under construction 52,380 1,261 105,927 (116,261) 1,028 42,279 ------------- -------------- ------------ ------------ ----------------------- 1,528,726 33,899 202,437 (728) 82,196 1,682,138 ............. .............. ............ ............ ....................... Financial assets Shares in affiliated companies 14,817 34 563 0 12,280 3,134 Loans to affiliated companies 2,203 18 394 0 1,898 717 Shares in associated companies 11,422 1,743 6,347 0 0 19,512 Securities 3,304 (17) 61 0 127 3,221 Other loans 130 0 314 0 151 293 ------------- -------------- ------------ ------------ ----------------------- 31,876 1,778 7,679 0 14,456 26,877 ............. .............. ............ ............ ....................... 1,658,879 37,182 225,496 0 110,548 1,811,009 ============= ============== ============ ============ =======================
------------------------------------------ Accumulated Net Depreciation book value ------------------------------------------ Depreciation Balance on Balance on for 12/31/97 12/31/97 the year - ------------- -------------------------- Intangible assets Concessions, industrial and similar rigths and assets and licences and licences in such rights and assets 28,764 21,418 6,822 Software 38,378 13,044 7,320 Goodwill 78 312 78 - ------------- ------------- ----------- 67,220 34,774 14,220 . ............. .......................... Tangible assets Land, leasehold rights and buildings including buildings on third party land 154,887 133,235 11,860 Technical equipment and machines 831,753 347,469 103,137 Other equipment, factory and ofiice equipment 130,277 42,238 21,981 Payments on account and assets under construction 0 42,279 0 - ------------- -------------------------- 1,116,917 565,221 136,978 . ............. .......................... Financial assets Shares in affiliated companies 2,189 945 692 Loans to affiliated companies 113 604 0 Shares in associated companies 0 19,512 0 Securities 0 3,221 0 Other loans 60 233 60 - ------------- -------------------------- 2,362 24,515 752 . ............. .......................... 1,186,499 624,510 151,950 = ============= ==========================
22
NON CONSOLIDATED GROUP COMPANIES /1/ Exhibit 2 as of December 31, 1997 - --------------------------------------------------------------------------------------------------------------------------------- COMPANY CITY COUNTRY SHAREHOLDER - --------------------------------------------------------------------------------------------------------------------------------- MATRA MHS GmbH ("MHSG") Eching Germany MHS, 100 % TEMIC UK Limited ("TMUK") Bracknell Great Britain MHS, 100 % TEMIC Nordic AB ("TMS") Sundyberg Sweden MHS, 100 % MATRA MHS Inc. ("MHSUSA") Santa Clara USA MHS, 100 % TEMIC Hong Kong Limited ("TMHK") Hong Kong China MHS, 100 % TEMIC Korea Limited ("TMROK") Seoul Korea TMHK, 12,320 shares (approx. 80 %) K.M. Park, 2,310 shares (approx. 15 %) Henry Lee, 770 shares (approx. 5 %) MATRA MHS Italia S.r.l. ("MHSI") Milano Italy MHS, 100 % TEMIC Usha Limited ("TMIND") Gurgaon India MHS, 465,187 shares (approx. 50 %) Usha Limited, 232,594 shares (approx. 25 %) Asharfi Chit Fund & Finance PVT Limited 232,593 (approx. 25 %) TEMIC France SNC ("TMF") Saint Quentin France MHS, capital contribution FF 90,000 (90 %) en Yvelines TMUK, capit. contrib. FF 10,000 (10 %) T. SQUARE Inc. ("TSQW") Santa Clara USA MHS, 2,223,000 shares of Series A preferred stock (approx. 20.62 %) 21 Investors Siliconix S.r.I. ("SILI") Milano Italy Siliconix Inc., 100 % - ------------------------------------------------------------------------------------------ TOTAL PROFIT COMPANY EQUITY (LOSS) - ------------------------------------------------------------------------------------------ MATRA MHS GmbH ("MHSG") DM 234,489 4,191 TEMIC UK Limited ("TMUK") GBP 119,194 (21,895) TEMIC Nordic AB ("TMS") SKR 1,421,788 262,023 MATRA MHS Inc. ("MHSUSA") US$ 0 0 TEMIC Hong Kong Limited ("TMHK") HK$ 1,625,300 125,298 TEMIC Korea Limited ("TMROK") US$ 156,063 (22,537) MATRA MHS Italia S.r.l. ("MHSI") LIT /2/ 80,837,311 (25,317,634) TEMIC Usha Limited ("TMIND") IR /2/ 28,181,348 17,761,435 TEMIC France SNC ("TMF") FF (3,002,487) (2,818,636) T. SQUARE Inc. ("TSQW") US$ 6,844,465 (3,938,535) Siliconix S.r.I. ("SILI") (currently without operations)
- ---------------- /1/ Included in the financial statements under German GAAP at cost /2/ Figures as of 12-31-1996 23 Exhibit 3 PARTICIPATIONS CONSOLIDATED AT EQUITY as of December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------- TOTAL PROFIT / Company City Country Shareholder EQUITY (LOSS) - ------------------------------------------------------------------------------------------------------------------------------- Shanghai SIMCONIX Electronic Ltd. Shanghai China Siliconix Inc. 50% US$ 21, 776,000 7,084,000 Shanghai Institute of Metal 50%
24 PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS VISHAY INTERTECHNOLOGY, INC. AND TEMIC SEMICONDUCTOR BUSINESS (UNAUDITED) The following pro forma condensed consolidated balance sheet (unaudited) as of December 31, 1997 and pro forma condensed consolidated statement of operations (unaudited) for the year ended December 31, 1997 give pro forma effect to the purchase by Vishay of 80.4% of the capital stock of Siliconix Incorporated and all of the capital stock of TEMIC Semiconductor GmbH from Daimler-Benz for total consideration of approximately $500,000,000 in cash and the sale of the TEMIC Integrated Circuits Division to Atmel for approximately $110,000,000. The pro forma condensed consolidated statement of operations for the year ended December 31, 1997 presents the results of operations of Vishay as if the above mentioned transactions (collectively,"the acquisition") were consummated as of January 1, 1997. The pro forma consolidated balance sheet (unaudited) as of December 31, 1997 presents the financial position of Vishay as if the acquisition had occurred as of December 31, 1997. The pro forma information is based on the historical financial statements of Vishay and the TEMIC Semiconductor Business, giving effect to the acquisition under the purchase method of accounting and the assumptions and adjustments set forth in the accompanying notes. These pro forma condensed consolidated financial statements have been prepared by Vishay's management based upon the audited combined financial statements of the TEMIC Semiconductor Business as of and for the year ended December 31, 1997. These pro forma financial statements may not be indicative of the results that actually would have occurred had the acquisition occurred on the dates indicated or those that may be obtained in the future. The pro forma financial statements should be read in conjunction with the consolidated financial statements of Vishay included in Vishay's Annual Report on Form 10-K for the year ended December 31, 1997, and the consolidated financial statements of the TEMIC Semiconductor Business for the year ended December 31, 1997 included in this Form 8-K/A. 25 NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Certain financial information has been derived from the combined audited financial statements and notes thereto of TEMIC Semiconductor GmbH for the year ended December 31, 1997. (A) Amounts for TEMIC have been translated from Deutsche Marks to U.S. Dollars as follows: Balance Sheet Data - at the approximate exchange rate in effect as of December 31, 1997 ($1 = DM 1.7885) Income Statement Data - at the approximate average exchange rate in effect during the year ended December 31, 1997 ($1 = DM 1.7331) (B) Reflects increase in outstanding indebtedness as a result of the purchase by Vishay of 80.4% of the issued and outstanding shares of Siliconix Incorporated and all of the capital stock of TEMIC Semiconductor GmbH from Daimler Benz for total consideration of approximately $500,000 and the sale of the TEMIC Integrated Circuits Division to Atmel for approximately $110,000. The purchase price and related costs were financed through long-term debt. Purchase price, net............................... 389,936 Professional fees and other costs................. 664 -------- Total purchase price $390,600 ========= The Company also paid $3,400 of bank costs associated with the credit facility used to finance the acquisition. (C) Under purchase accounting, the total purchase price is allocated to assets acquired and liabilities assumed based on their estimated fair values. Purchase accounting adjustments have been preliminarily estimated by Vishay's management based upon currently available information. There can be no assurance, however, that the estimated adjustments represent the final purchase accounting adjustments that will ultimately be determined. Management is waiting for the results of appraisals and other information that will be required to determine the final purchase allocation. The following pro forma adjustments have been made to reflect the estimated fair values of the acquired assets and liabilities as of December 31, 1997. Net Assets Increase (Decrease) Property and equipment ................................. 48,942 Estimated TEMIC restructuring costs .................... (38,551) Deferred income taxes Other current assets ................................ 17,931 Other non-current liabilities ....................... (14,553) Elimination of TEMIC goodwill .......................... (174) Elimination of TEMIC Stockholders' Equity .............. (139,546) Minority Interest ...................................... (1,713) TEMIC debt to Daimler-Benz not assumed by Vishay ....... Short-term .................................... 118,642 Long-term ..................................... 13,012 Cost in excess of net assets acquired .................. 107,518 26 (D) For purposes of determining the pro forma effect of the TEMIC acquisition on the Vishay consolidated statement of operations, the following estimated pro forma adjustments have been made: INCREASE (DECREASE) INCOME YEAR ENDED 12/31/97 1. Interest expense on additional variable rate long-term debt of $390,000 at a 6.30% assumed interest rate....... $(24,570) 2. Interest expense reduction due to refinancing of TEMIC debt by Vishay.............. 3,994 3. Increase in depreciation resulting from adjustments to fair value of property, plant and equipment and the establishment by Vishay of estimated remaining useful lives........ (5,757) 4. Amortization of cost in excess of net assets acquired(goodwill) over a forty-year period..... (2,688) 5. Amortization of deferred bank costs over a five-year period...................... (680) 6. Income tax benefit applicable to adjustments at a 38% assumed rate................ 11,286 --------- $ (18,415) (E) Pro forma earnings per share for the year ended December 31, 1997 was computed as follows: Weighted average number of common shares outstanding 64,459 Pro forma net earnings.......... $66,110 ======= Pro forma net earnings per share $ 1.03 ======= (F) Long-term bank borrowings relating to the acquisition are at variable rates. An increase or decrease of 1/2% in the interest rate on such borrowings would decrease or increase pro forma net earnings and earnings per share by approximately $1,209 and $0.02, respectively. 27
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) DECEMBER 31, 1997 AS REPORTED DECEMBER 31, ---------------------------- DIALOGUE - SALE PRO FORMA 1997 VISHAY TEMIC NOT ACQUIRED TO ATMEL ADJUSTMENTS PRO FORMA ---------------------------- ------------- --------------- ----------- ------------ (IN THOUSANDS) ASSETS Cash and cash equivalents $55,263 $18,753 $1,208 $6,705 ($3,400) (B) $62,703 Accounts receivable 186,687 161,324 9,221 73,484 265,307 Inventories 339,371 153,634 2,720 42,263 448,022 Other current assets 64,650 53,002 953 13,202 17,931 (C) 121,428 ----------- --------- ------------ ------------- -------------- ---------- Total Current Assets 645,971 386,713 14,102 135,653 14,531 897,460 Property and equipment 709,142 316,031 2,594 98,612 48,942 (C) 972,908 Goodwill 286,923 174 107,518 (C) 394,441 (174) (C) Other assets 77,612 47,272 1,393 30,589 3,400 (B) 96,302 ----------- --------- ------------ ------------- -------------- ----------- $1,719,648 $750,191 $18,089 $264,855 $174,217 $2,361,111 =========== ========= ============ ============= ============== -========== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts and notes payable $77,851 $82,991 $4,588 $40,008 $0 $116,246 Other current liabilities 108,527 59,389 2,394 44,506 38,551 (C) 159,567 Short term borrowings 0 143,972 5,921 19,409 (118,642) (C) (0) Current portion of long-term debt 4,459 0 0 0 4,459 ----------- --------- ------------ ------------- -------------- ----------- Total Current Liabilities 190,837 286,352 12,902 103,923 (80,091) 280,272 Long-term debt 347,463 57,373 0 44,361 (13,012) (C) 738,063 390,600 (B) Deferred income 59,300 0 0 0 59,300 Other non-current liabilities 144,470 127,950 7 21,135 14,553 (C) 265,830 Minority Interest 17,930 38,355 0 0 1,713 (C) 57,998 Stockholders' equity Common stock 5,646 0 0 0 5,646 Other stockholders' equity 954,002 240,162 5,180 95,436 (139,546) (C) 954,002 ----------- --------- ------------ ------------- -------------- ---------- $1,719,648 $750,191 $18,089 $264,855 $174,217 $2,361,111 =========== ========= ============== ================ ================= =========== See notes to pro forma condensed consolidated financial statements. 28 PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 1997 YEAR ENDED AS REPORTED PRO FORMA DECEMBER 31, ---------------------- DIALOGUE - SALE ADJUSTMENTS 1997 VISHAY TEMIC NOT ACQUIRED TO ATMEL - NOTE D PRO FORMA --------------------------------------------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net sales $1,125,219 $883,368 $43,565 $278,954 $1,686,068 Costs of products sold 858,020 657,287 33,424 208,828 $5,757 1,278,812 ----------- --------- -------- --------- ----------- ----------- Gross profit 267,199 226,081 10,140 70,127 (5,757) 407,256 Selling, general, and administrative expenses 136,876 217,522 7,574 91,051 680 256,454 Amortization of goodwill 7,218 2,688 9,906 Unusual items 14,503 14,503 ----------- --------- -------- --------- ----------- ----------- Operating income 108,602 8,559 2,566 (20,924) (9,125) 126,393 Other income (expense): Interest expense (18,819) (8,557) (247) (4,316) (20,576) (43,389) Other (2,314) 9,456 55 88 6,999 ----------- --------- -------- --------- ----------- ----------- (21,133) 899 (192) (4,228) (20,576) (36,390) ----------- --------- -------- --------- ----------- ----------- Earnings before income taxes 87,469 9,458 2,374 (25,151) (29,701) 90,003 Income taxes 34,167 251 (1,357) 596 (11,286) 23,893 ----------- --------- -------- --------- ----------- ----------- Net earnings $53,302 $9,207 $3,731 ($25,748) ($18,415) $66,110 =========== ========= ======== ========= =========== =========== Basic and diluted earnings per share $0.83 $1.03 Weighted average shares outstanding - assuming dilution 64,459 64,459
See notes to pro forma condensed consolidated financial statements. 29 EXHIBIT INDEX Exhibit No. Description Page No. 23 Consent of Independent Accountants 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized. VISHAY INTERTECHNOLOGY, INC. By: /s/ Richard N. Grubb ---------------------- Name: Richard N. Grubb Title: Executive Vice President, Treasurer and Chief Financial Officer Date: May 15, 1998 31 EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS Consent of Independent Accountants To the shareholders of the TEMIC Semiconductor Business We consent to the incorporation by reference in the following registration statements (No. 33-7850, 33-7851 and 33-59609) on Form S-8 of Vishay Intertechnology, Inc. of our report dated May 14, 1998, with respect to the combined balance sheet of the TEMIC Semiconductor Business as of December 31, 1997, and the related combined statements of revenues and expenses and cash flow, included in Vishay Intertechnology Inc.'s Form 8-K filed with the Securities Exchange Commission. KPMG Deutsche Treuhand-Gesellschaft AG Stuttgart, Germany May 14, 1998 -----END PRIVACY-ENHANCED MESSAGE-----