EX-99.1 2 0002.txt FOR IMMEDIATE RELEASE CONTACT: TIM IRIS (631) 847-3169 GENERAL SEMICONDUCTOR REPORTS FOURTH QUARTER AND YEAR END 2000 RESULTS SALES AND EARNINGS FOR THE YEAR REACH RECORD HIGHS MELVILLE, NY (FEBRUARY 8, 2001)--GENERAL SEMICONDUCTOR, INC. (NYSE:SEM), a leading manufacturer of power management devices, today reported results for the quarter and year ended December 31, 2000. Sales increased 6.3% to $119.9 million from the $112.8 million recorded in the fourth quarter of 1999. Sales of $493.7 million for the year increased 18.4% over the $417.1 reported in 1999 and reached a record high. Fourth quarter operating income of $19.8 million represents a 7.6% increase over the $18.4 million for the same period a year ago. Gross margin improved to 32.5% of sales compared with 30.8% in the fourth quarter of 1999. Net income rose 26.1% to $11.1 million from the $8.8 million reported a year ago. Diluted earnings per share were $0.26, a 13 % increase over the $0.23 reported for the similar period. Sequentially, sales decreased 8.1% from the record $130.5 million reported for the third quarter of 2000. The sequential sales decline was a result of an increased level of inventory at distributors and several OEM customers due to moderating end market growth from the high levels experienced in the first half of 2000. For the year ended December 31, 2000, operating income rose 50.4% from $56.0 million to $84.2 million. Diluted earnings per share improved by 63.6% from $0.66 to a record high of $1.08. "We are extremely pleased with the record performance of our business in 2000," stated Ronald A. Ostertag, Chairman and Chief Executive Officer. "We are disappointed that the recent slowdown in technology spending and subsequent increase in inventory levels at several of our customers has effected our short term performance. However, we are very pleased with our progress against our power management strategy and are confident that our evolving new product portfolio will fuel the continued long term growth of General Semiconductor." New products represented over 8.0% of sales in the quarter compared to 4.7% in the same quarter a year ago, demonstrating the continued success of our strategy. An additional 24 MOSFET design wins were registered in the fourth quarter, bringing the total for 2000 to 70. Sales from new products for the full year more than doubled from the level recorded in 1999. Cash generation remained strong in the quarter with the Company repaying an additional $14 million on its revolving credit facility. The Company repaid a total of $60 million in 2000, reducing borrowings under the revolving credit facility by over 57% to $44 million. Total long-term debt was reduced from $276.5 million at 1999 year end to $216.5 million, including $172.5 million in Convertible Subordinated Notes. BUSINESS OUTLOOK Based on the current market conditions, the Company expects that revenues in the first quarter of 2001 will decline approximately 6-9% sequentially. Earnings per share are expected to be between $0.18 and $0.20 before restructuring charges as discussed below. "With visibility remaining low, we remain cautious in our guidance for full year results" stated Robert J. Gange, Sr. Vice President and Chief Financial Officer. "We expect only moderate sequential growth for the second quarter as excess inventory in the channels continues to be depleted. Based on indications from our customer base, we expect stronger growth to resume in the second half of 2001." The Company remains committed to increasing its investment in new products and plans to increase spending on research and development by 65-75% over 2000 levels. The Company has recently instituted a program to improve the cost structure on some of its mature product lines and streamline its sales and administrative functions. Headcount reductions are planned through a combination of worldwide programs, including early retirement and reductions in force. A restructuring charge of up to $14 million is expected to be taken in the first quarter of 2001. "We have always had a mindset of improving our cost structure," remarked Mr. Ostertag. "By leveraging our investment in enterprise wide information technology, we will remove non-value added activities in the order through delivery process. We believe that by streamlining our operations, we will be better able to address the exciting opportunities we have identified to develop new technologies that will satisfy our customers' power management requirements." General Semiconductor, Inc. is a market leader in the design, manufacture and distribution of power semiconductor components. The Company provides customers with a broad array of power management products including rectifiers, transient voltage suppressors, small signal transistors, diodes and MOSFETs. Its global customer base includes original equipment manufacturers, electronic distributors and contract equipment manufacturers. Key markets for its products include automotive, computers, consumer and telecommunications equipment. JOIN US FOR OUR CONFERENCE CALL TO BE BROADCAST LIVE AT 8:30 AM, THURSDAY, FEBRUARY 8, 2001 BY VISITING OUR WEBSITE AT: www.gensemi.com --------------- The information set forth above includes "forward-looking" information and, accordingly, the cautionary statements contained in Exhibit 99 to the Company's Form 10-K and Form 10-Q filings with the Securities and Exchange Commission are incorporated herein by reference. General Semiconductor's actual results could differ materially from the "forward-looking" information in this press release. GENERAL SEMICONDUCTOR, INC. CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE INFORMATION) (UNAUDITED) THREE MONTHS ENDED YEAR ENDED DECEMBER 31 DECEMBER 31 ---------------------------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- NET SALES $ 119,912 $ 112,782 $ 493,721 $ 417,082 COST OF SALES 80,914 78,058 339,538 302,476 ---------- ---------- ---------- ---------- GROSS PROFIT 38,998 34,724 154,183 114,606 ---------- ---------- ---------- ---------- Selling, general and administrative 15,593 13,025 57,047 46,567 Research and development 2,368 1,995 7,785 6,903 Amortization of excess of cost over fair value of net assets acquired 1,286 1,286 5,141 5,142 ---------- ---------- ---------- ---------- OPERATING INCOME 19,751 18,418 84,210 55,994 ---------- ---------- ---------- ---------- Other income (expense) - net (58) (67) (83) (9) Interest expense - net (4,112) (6,590) (18,756) (23,466) ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 15,581 11,761 65,371 32,519 Provision for income taxes (4,441) (2 ,940) (18,631) (8,130) ---------- ---------- ---------- ---------- NET INCOME $ 11,140 $ 8,821 $ 46,740 $ 24,389 ========== ========== ========== ========== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 37,722 36,868 37,608 36,832 Diluted 49,091 39,449 49,562 37,563 EARNINGS PER SHARE: Basic $ 0.30 $ 0.24 $ 1.24 $ 0.66 Diluted $ 0.26 $ 0.23 $ 1.08 $ 0.66 GENERAL SEMICONDUCTOR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) DECEMBER 31, DECEMBER 31, 2000 1999 ---------- ---------- Cash $ 4,913 $ 2,586 Accounts receivable, less allowance for doubtful accounts 66,246 63,246 Inventories 53,698 43,480 Other current assets 25,151 21,973 ---------- ---------- Total current assets 150,008 131,285 Total non-current assets 445,281 442,514 ---------- ---------- TOTAL ASSETS $ 595,289 $ 573,799 ========== ========== Total current liabilities $ 99,877 $ 66,564 ---------- ---------- Long-term debt 216,500 276,500 Other liabilities 91,237 99,353 ---------- ---------- Total non-current liabilities 307,737 375,853 ---------- ---------- Total liabilities 407,614 442,417 Total stockholders' equity 187,675 131,382 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 595,289 $ 573,799 ========== ========== GENERAL SEMICONDUCTOR, INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (UNAUDITED - IN THOUSANDS) YEAR ENDED DECEMBER 31, ------------------------- 2000 1999 ---------- ---------- Net Income $ 46,740 $ 24,389 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 29,961 27,806 Changes in assets and liabilities 11,628 (10,355) ---------- ---------- Net cash provided by operating activities 88,329 41,840 Capital expenditures (34,887) (27,328) Net cash used in financing activities (51,115) (15,151) ---------- ---------- Increase (decrease) in cash 2,327 (639) Cash, beginning of period 2,586 3,225 ---------- ---------- Cash, end of period $ 4,913 $ 2,586 ========== ========== APPENDIX 1 GENERAL SEMICONDUCTOR, INC. E.P.S. CALCULATION (Unaudited - In Thousands, Except Per Share Information) Three Twelve months ended months ended December 31, December 31, 2000 2000 ---------- ---------- Net income $ 11,140 $ 46,740 Convert add-back(a) 1,704 6,769 ---------- ---------- $ 12,844 $ 53,509 ========== ========== E.P.S. CALCULATION: ------------------- Numerator-income plus add-back $ 12,844 $ 53,509 ---------- ---------- Denominator-weighted average shares 49,091 49,562 Diluted E.P.S. $ 0.26 $ 1.08 (a) Represents expense incurred for interest related to the convertible notes and the amortization of deferred financing fees associated with the convertible notes, tax effected at the Company's domestic marginal tax rate. Q4 $2,714* (100% - 37.2%) = $1,704 YTD Dec. 31 $1,669(Q1) + $1,698(Q2) + $1,698(Q3) + $1,704(Q4) = $6,769