V I S H A Y I N T E R T E C H N O L O G Y, I N C .
A N N U A L R E P O R T 2 0 0 0
VISHAY INTERTECHNOLOGY, INC.
MANUFACTURER OF THE WORLD’S BROADEST LINE OF DISCRETE ELECTRONIC COMPONENTS
Vishay Intertechnology, Inc. (NYSE: VSH), a Fortune
1,000 Company with annual sales of $2.5 billion, is the
largest U.S. and European manufacturer of passive
electronic components (resistors, capacitors, inductors)
and a major producer of discrete semiconductors
(diodes, optoelectronics, transistors), IrDCs (infrared
communication devices), and power and analog
switching integrated circuits. The Company’s
components can be found in products manufactured in a
very broad range of industries worldwide. With
headquarters in Malvern, Pennsylvania, Vishay employs
over 20,000 people in 66 plants in the U.S., Mexico,
Germany, Austria, the United Kingdom, France, Portugal,
the Czech Republic,
Hungary, Israel, Taiwan,
China and the Philippines.
Vishay can be found on the
internet at www.vishay.com.
Vishay Telefunken optical
sensors
www.vishay.com
Vishay Dale thermistors
Vishay Siliconix power
integrated circuits (ICs)
Table of Contents
Financial Highlights ........................................................... 1
A Message from the Chairman ............................................. 2
Overview: Market Growth, Company Growth ........................ 4
The Vishay Story ................................................................. 6
Communications Equipment Market ..................................... 9
Computer Market ............................................................. 12
Automotive Electronics Market ........................................ 14
Industrial and Medical Electronics Market ....................... 16
Military and Aerospace Equipment Market ....................... 17
Technological Innovation ................................................ 18
Financial Report: ............................................................. 19
Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity
Notes to Consolidated Financial Statements
About the Cover
Report of Independent Auditors
The front cover photo includes a printed circuit board from a modem, a
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Financial Summary
schematic drawing of an electronic circuit, and a silicon wafer. Silicon
wafers such as this one are cut into small chips for Vishay transistors,
integrated circuits, and other components that are widely used in
Corporate Information ............................... inside back spread
electronic circuits.
Financial Highlights
1
As of and For the Year Ended December 31
2000
1999
1998
(In thousands, except per share amounts)
Net sales ......................................................................
$ 2,465,066
$ 1,760,091
$ 1,572,745
Operating profit ............................................................
Net earnings .................................................................
Depreciation and amortization ........................................
Basic earnings per share ................................................
Diluted earnings per share ..............................................
$
$
Weighted average shares outstanding – basic ...................
Weighted average shares outstanding – diluted ................
696,498
517,864
140,840
3.83
3.77
135,295
137,463
193,744
83,237*
139,676
0.66*
0.65*
126,678
128,233
$
$
93,925
8,212*
127,947
0.07*
0.07*
126,665
126,797
$
$
Cash flows from operations .............................................
$
542,319
$
239,547
$
169,450
Working capital .............................................................
1,057,200
Property and equipment – net ........................................
Long-term debt .............................................................
973,554
140,467
604,150
930,545
656,943
650,483
997,067
814,838
Stockholders’ equity ......................................................
$ 1,833,855
$ 1,013,592
$ 1,002,519
Net Sales
$ In Millions
1
.
5
6
4
,
2
$
1
.
0
6
7
,
1
$
7
.
2
7
5
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$
0
.
8
9
0
,
1
$
2
.
5
2
1
,
1
$
1996
1997
1998
1999
2000
$600
$500
$400
$300
$200
$100
$0
Net Earnings
$ In Millions
Diluted Earnings per Share
9
.
7
1
5
$
*
*
0
.
9
7
$
*
6
.
2
5
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.
8
$
*
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.
7
9
$
*
2
.
3
8
$
1996
1997
1998
1999
2000
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
7
7
.
3
$
*
*
6
7
.
0
$
*
5
6
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0
$
*
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6
.
0
$
*
1
4
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0
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*
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4
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0
$
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4
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0
$
*
*
1
5
.
0
$
*
7
0
.
0
$
1996
1997
1998
1999
2000
Includes charges for the sale of a subsidiary and a German tax rate change of $14,562,000 ($0.11 per share) for the year ended December 31, 1999, and restructuring expenses and unusual
charges of $55,335,000 ($0.44 per share), $27,692,000 ($0.22 per share), and $38,030,000 ($0.21 per share) for the years ended December 31, 1998, 1997 and 1996, respectively.
Lighter shade in graphs excludes charges for the sale of a subsidiary and a German tax rate change of $14,562,000 ($0.11 per share) for the year ended December 31, 1999, and
restructuring expenses and unusual charges of $55,335,000 ($0.44 per share), $27,692,000 ($0.22 per share), and $38,030,000 ($0.21 per share) in 1998, 1997 and 1996, respectively.
$2,500
$2,000
$1,500
$1,000
$500
$0
*
**
A MESSAGE FROM THE CHAIRMAN
To Our Shareholders, Employees, Customers, and Vendors:
Year 2000
Looking back at our excellent results during the year 2000,
• Spectrol: a manufacturer of sensing transducer-type
demand from our customers reached record highs in
potentiometers used primarily in the automotive industry,
practically all of our product areas, resulting in shortages of
and trimmer potentiometers used in various types of
many of our components in the market place. Our sales
electronic circuitry.
reached $2,465,066,000 and our net earnings were
$517,864,000 (21% net return on sales); earnings per share
• Tansitor: the leading manufacturer of wet tantalum
were $3.77.
electrolytic capacitors used for military applications, and
miniature conformal coated solid tantalum capacitors used
Demand was fueled primarily by growth in the wireless
for hearing aids.
communications market, as well as growth in other major
market sectors. Annual global shipments of cell phones
During 2000, we also sold our 65% participation in Lite-On
increased from 110 million units in 1997 to 283 million
Power Semiconductor Corporation (LPSC) and realized a
units in 1999 and to 405 million units in 2000. This
pretax gain of $8.4 million. We decided to exit this joint
represented a 43% increase in shipments of cell phones in
venture due to the unsatisfactory performance of this
2000 compared to 1999. At the same time, the number of
partnership.
passive components per phone continued to increase. As a
result of this strong demand, our bookings (orders) were
Recently, we made an offer to purchase the 19.6% of
$2.8 billion in 2000, a 40% increase over 1999, and annual
Siliconix in public hands at a price of $28.82 per share.
sales approached $2.5 billion.
Financial Highlights
Our passive components business, which represented 66%
For the year ended December 31, 2000, sales were
of total Company sales in 2000, had outstanding results,
$2,465,066,000, compared to $1,760,091,000 in the
with gross margins of 42% as compared to 22% in 1999.
previous year, an increase of 40.0%. Net earnings for the
Our semiconductor business, consisting of Siliconix and
year ended December 31, 2000 were $517,864,000 or $3.77
Telefunken, which represented 34% of total Company sales
per share (diluted), compared to $83,237,000 or $0.65 per
in 2000, also had outstanding results, with gross margins of
share (diluted) in the previous year, an increase of 522.2%.
39% as compared to 32% in 1999.
Earnings per share amounts for both periods reflect a 3-for-
During the year, we strengthened the Company with four
2 stock split paid June 9, 2000.
small acquisitions which in total will add approximately $70
million annually to our sales and be accretive to earnings in
Gross profits for the year ended December 31, 2000 were
2001. These four acquisitions were:
40.8% of net sales, compared to 26.2% in the prior year.
Selling, general, and administrative expenses were 12.1% of
• Electro-Films, Inc.: a technology leader in the manufac-
net sales for the year ended December 31, 2000, compared
ture of thin-film components and networks on ceramic and
to 14.5% of sales in the prior year. This resulted in
silicon, including resistors, capacitors, inductors, and
operating income reaching $696,498,000 or 28.3% of net
microwave components.
sales for the year ended December 31, 2000, compared to
$193,744,000 or 11.0% of net sales in the prior year, an
• Cera-Mite Corporation: a worldwide supplier of ceramic
increase of 260%.
disc capacitors and thermistors. Cera-Mite is known for its
excellence in the technology of ceramic materials.
2
A MESSAGE FROM THE CHAIRMAN
3
The Company generated substantial cash during the year
Vishay has a cash
2000, resulting in the Company being in the strongest
surplus of
financial condition in its history. For the year ended
$197,000,000 in
December 31, 2000, the Company’s cash flow from opera-
excess of its long-
tions was $542,319,000, compared to cash flow from
term debt, and
operations of $239,547,000 in the prior year. Purchases of
almost $2 billion in
property and equipment for the year ended December 31,
equity. This puts
2000 were $229,781,000 as compared to $119,638,000 in
Vishay in a position
the prior year.
In addition, in May 2000, the Company completed a
to grow through
acquisitions and
take advantage of
Dr. Felix Zandman
successful secondary public offering by selling 8,392,500
any softening in
shares of its common stock, with net proceeds to the
economic conditions that temporarily decreases the prices
Company of $395 million. The Company used these proceeds
of Vishay’s potential acquisition targets. During past
and free cash generated from operations to repay the debt
industry downturns, Vishay generally has done better than
outstanding under its long-term revolving credit facility. Our
competing companies and has emerged stronger than ever.
cash balance at December 31, 2000 was $337,000,000 and
We are poised to acquire businesses in the active and
long-term debt was $140,000,000, resulting in a net cash
passive component markets that will further strengthen
position of $197,000,000 … our best balance sheet ever.
Vishay. This is consistent with Vishay’s historic ability to
Looking Ahead
maintain a competitive edge throughout economic cycles.
In the year 2001 and beyond, we will continue to build on
The year 2001 industry environment involves revised sales
our position as a leader in the U.S., European, and Asian
forecasts of end products such as cellular telephones and
electronics markets.
computers. The business environment for some of our
customers (producers of cell phones and computers)
We are extremely grateful to our employees worldwide for
therefore involves reduction in supplies of electronic
their loyalty, skill, and energy which has contributed
components, which is our business.
significantly to our growth. We value highly the relationship
While the year 2000 was very good for Vishay, as evidenced
shareholders, we thank you for your continued confidence
by our historically high results, 2001 will be a time for
in Vishay. We look forward to meeting the challenges ahead.
we have with our customers and suppliers. To our fellow
adjustment. We hope that this period of adjustment,
characterized by customer inventory reductions, reductions
Sincerely,
in market demand, and order cancellations, will be tempo-
rary. However, this lower market profile will provide new
opportunities for Vishay to leverage its strong financial
position and aggressively pursue new acquisitions. We
believe that Vishay’s acquisition strategy, new product
Felix Zandman
development, and continuing cost reduction measures,
Chairman of the Board and Chief Executive Officer
together with improving industry conditions by the end of
April 2001
2001 as predicted by many industry sources, will benefit the
Company and its shareholders.
OVERVIEW: MARKET GROWTH, COMPANY GROWTH
Vishay manufactures the broadest portfolio of discrete electronic
components (passives and actives) in the industry, with market shares
ranging from substantial to number one for each product.
Vishay components are essential “building blocks” of
Vishay’s diverse product line, in addition to minimizing the
electronic circuits that power technology and communica-
impact of industry business cycles, gives customers the
tions. Worldwide demand for electronic components used in
benefits of one-stop shopping. Customers can turn to
these circuits continues to increase each year. This drives
Vishay for total discrete component solutions, while Vishay
growing demand for Vishay products in all major market
becomes involved in the early stages of customers’ product
sectors.
development and design.
Growing Market Demand
Skilled Management
Widely used electronic products — everything from cell
Vishay’s dramatic growth — from sales of $57 million in
phones and personal digital assistants (PDAs) to notebook
1985 to $2.5 billion in 2000 — has been guided by a
computers to medical devices — are becoming faster and
skilled management team. Vishay continually explores
more complex. Meanwhile, sophisticated electronic circuits
acquisition opportunities with an eye towards complement-
continue to displace mechanical systems in automobiles,
ing existing Vishay product lines, enhancing operations, and
industrial manufacturing equipment, even household
improving the bottom line. Vishay’s acquisition strategy and
appliances. Despite ups and downs in different market
continuing commitment to product innovation have made
sectors, the total global electronic component market is
Vishay a global industry leader. Management focus on
projected to grow from approximately $288.7 billion in
streamlining operations and reducing costs has enabled the
2001 to approximately $369.3 billion in 2003.* This
Company to maintain a competitive edge during industry
translates into growing demand for passive and active
downturns, maximize the benefits of market upswings, and
electronic components made by Vishay.
plan successfully for the future.
The Vishay Advantage
Vishay Partners with Leaders
4
4
Vishay manufactures the broadest portfolio of discrete
Vishay’s customers include leading original-equipment
electronic components (passives and actives) in the
manufacturers (OEMs) with widely recognized brand names.
industry, with market shares ranging from substantial to
These include Intel, Cisco, Nortel, Nokia, Siemens, Ericsson,
number one for each product. Vishay’s product portfolio
Motorola, IBM, Sony, Compaq, and Dell, to name just a few.
enables it to offset moderating demand for some compo-
Vishay also benefits from the trend towards outsourcing and
nents with strong demand for others. In addition to
the dramatic growth of contract manufacturing of comput-
manufacturing commodity products that are sold by the
ers, phones, and other consumer products. Vishay is a key
billions each year, Vishay also manufactures high-tech,
supplier to leading electronics manufacturing services (EMS)
high-margin products protected by Vishay patents and
companies such as Solectron, SCI, Celestica, Jabil, and
proprietary know-how.
Flextronics. Vishay also has strong relationships with
* Cahners Electronics Group, 2001
Vishay Product Line
55
Passive Components
Semiconductor Components
Capacitors
Resistors
Magnetics
Diodes
Transistors Optoelectronics
ICs
Tantalum
Film
Inductors
Ceramic
Foil
Trans-
formers
Small
Signal
Zener
Film
Wirewound
Rectifiers
Power
Variable
Aluminum
Opto-
couplers
LEDs
Power ICs
Analog
Switches
IrDC
PowerMOS
Small
Signal FETs
RF
Transistors
MOSMICs
Passive components reduce electrical currents, store electric energy, or filter
frequencies. They are referred to as passive because they do not amplify DC
current or voltage. In contrast, semiconductor (active) components amplify
electrical currents, convert currents, or switch electronic and optical signals.
leading component distributors. Key distributors of Vishay
mission. Vishay serves customers through a global network
components include global leaders such as Arrow, Avnet,
of manufacturing facilities, sales and technical support
Future, and TTI, as well as top regional and local distribu-
offices, independent distributorships, and manufacturers’
tors. When it comes to OEM customers, EMS customers, and
representatives. To ensure uninterrupted supplies to
distributors, Vishay partners with the leaders.
customers, Vishay maintains dual or triple internal manufac-
Customer Service
turing sourcing for most of its products. Vishay has
customer service centers and inventories strategically
Vishay addresses essentially all of its customers’ discrete
located where customers need them — in The Americas,
electronic component needs. Vishay’s commitment to
Europe, and Asia.
superior customer service is a key part of its corporate
THE VISHAY STORY
Vishay and the industry have grown, driven by the emergence of new
technologies, industry consolidation, a commitment to solve customer
problems, and an ongoing effort to make products better, more cost-
efficient, and defect-free.
Initial Technology Breakthroughs
Acquisitions and Dramatic Growth
In the 1950s, as the electronics industry began its acceler-
By the early ’80s, Vishay was positioned to grow signifi-
ated growth, Dr. Felix Zandman, a physicist, and current
cantly. Because the markets for PhotoStress, resistance
Chairman and CEO of Vishay, was issued patents for his
strain gages, and ultra-precise resistors were relatively
PhotoStress® coatings and instruments. These devices are
small, the Company moved to expand into high-volume
used to reveal and measure the distribution of stresses in
resistors. Such resistors are used by the billions every year,
structures under live load conditions such as airplanes and
in virtually every sector of the electronics industry.
cars. Dr. Zandman’s research in this area led him to develop
Bulk Metal® foil resistors — ultra-precise, ultra-stable
Vishay’s strategy was to enter the market through the
resistors that provide performance far beyond any other
acquisition of respected, well-positioned manufacturers.
resistor available.
The Company set strict acquisition criteria for technologi-
cal strength, brand recognition, manufacturing capabili-
In 1962, Dr. Zandman, with the financial help of the late
ties, markets served, and management depth.
Alfred P. Slaner, founded Vishay to develop and manufacture
Bulk Metal foil resistors. Concurrently, J.E. Starr, a colleague
Beginning in 1985, Dale Electronics, Draloric Electronics,
of Dr. Zandman, developed foil resistance strain gages,
and Sfernice were acquired. These new operations helped
which also became a part of Vishay. The Company was
produce dramatic sales growth — from $57 million to more
named after Dr. Zandman’s and Mr. Slaner’s ancestral village
than $400 million in just three years. Vishay quickly
in Lithuania, in memory of family members who perished in
achieved a position as the largest fixed resistor manufac-
the Holocaust.
turer in the United States and Europe.
6
Throughout the ’60s and ’70s, Vishay established itself as a
New Products and Markets
technical and market leader in PhotoStress products, strain
These acquisitions also brought other passive electronic
gages, and foil resistors.
components into Vishay, such as inductors, specialty
PHOTOSTRESS®
AND STRAIN
GAGES
PhotoStress is an optical method of measuring structural stresses. A PhotoStress-coated
structure, when viewed through a polariscope, reveals stress distribution in the form of
color fringes. Strain gages are resistive sensors used to measure stresses or weight.
Vishay Measurements Group is the world’s largest producer of PhotoStress and strain gage
products for testing laboratories, manufacturers of electronic scales, and other markets.
7
7
VISHAY’S MARKETS
All electronic circuits:
• Communications equipment
• Computers
• Automotive electronics
• Instrumentation and medical electronics
• Military and aerospace equipment
• Industrial, commercial, and
entertainment equipment
capacitors, plasma displays, specialty connectors, trans-
Major acquisitions included Sprague Electric, the inventor
formers, thermistors, and oscillators — complementing
and manufacturer of tantalum capacitors; Roederstein, a
Vishay’s strength in resistors. In fact, this diversification
manufacturer of film, aluminum, and ceramic disc capacitors
underscores the strategy that Vishay continues to pursue
and thick film chip resistors; and Vitramon, a high-quality
today — to be the manufacturer of the broadest line of
manufacturer of multilayer ceramic chip capacitors. By
discrete electronic components in the industry.
1994, annual sales had reached $988 million.
In the early ’90s, Vishay applied its acquisition strategy to
Expansion into Semiconductors
the high-volume capacitor market, extending its range of
In 1997, Vishay entered the discrete semiconductor market,
products and increasing penetration in passive components.
acquiring 65% of LPSC. In 1998, Vishay acquired the
RESISTORS
Bulk Metal® Foil Resistors (cid:1)
Metal Film Resistors and
Resistors are the most widely used type of electronic component. They control the
flow of electrical current, just as valves control water flow. The basic unit of
resistance is the ohm. Fixed resistors have a constant ohmic value. Variable
resistors can be adjusted to different values to modify circuit behavior. Resistors
designed to change value in response to temperature change are called thermistors.
Networks (cid:1) Thick Film Resistors and Networks (cid:1) Thick Film R/C Networks (cid:1) Thin Film Resistors and Networks (cid:1) Current Sensing Resistors (cid:1)
MISSION STATEMENT
TO PROVIDE OUR CUSTOMERS WITH:
• a single manufacturing source for
passive components and discrete
semiconductors
Semiconductor Business Group of TEMIC, which included
Telefunken and 80.4% of Siliconix, producers of transistors,
diodes, optoelectronics, and power and analog switching
integrated circuits. Vishay sold its interest in LPSC (a joint
venture that did not meet Vishay’s expectations) in July
2000 in order to better focus on its successful Siliconix and
Telefunken businesses. Vishay’s Siliconix division — based
• quality state-of-the-art products at
in Silicon Valley — and Telefunken unit are known for
competitive prices
innovations in product performance, packaging, and
• a continuous stream of new products
technology.
• superior customer service worldwide
TO PROVIDE OUR SUPPLIERS WITH:
• reliable long-term relationships
TO PROVIDE OUR SHAREHOLDERS WITH:
Ongoing Growth
Vishay and the industry have grown, driven by the emer-
gence of new technologies, industry consolidation, a
commitment to solve customer and application problems,
and an ongoing effort to make products better, more cost-
• a good return on their investment
efficient, and defect-free. Recent acquisitions have included
TO PROVIDE OUR EMPLOYEES WITH:
• responsible and ethical leadership
• a creative working environment
• responsible community membership
at all Vishay locations
Electro-Films, Cera-Mite, Spectrol, and Tansitor, each of
which, while relatively small, has enhanced Vishay’s product
portfolio and provided new opportunities for synergy across
product lines. With a balance sheet consisting of $337
million in cash, $140 million in long-term debt, and almost
$2 billion in equity, Vishay remains well positioned for new
acquisitions.
88
RESISTORS
Wirewound Resistors (cid:1)
Power Metal® Strip
Vishay resistors range from ultra-precision aerospace and instrumentation components
that withstand extreme temperature conditions to miniature chip resistors used in cell
phones and other familiar consumer products.
Resistors (cid:1) Panel Controls (cid:1) Thermistors (cid:1) Varistors (cid:1) Fuse Resistors (cid:1) Trimming Potentiometers (cid:1) Panel Potentiometers
COMMUNICATIONS EQUIPMENT MARKET
9
9
The growth of the global communications equipment
market fuels growing demand for Vishay semiconductors
and passive electronic components.
The total worldwide communications equipment
market is expected to grow from approximately $1.27
trillion in 2001 to approximately $1.48 trillion in
2003.* These numbers, which take into account
equipment for networking, LAN and Internet access,
voice communications, and mobile communications,
as well as telecommunications services, reflect the
growing convergence of voice, data, and video into
“broadband” communications.
* Dataquest, April 2000
components.
Telecommunications towers are part of the infrastructure for
voice and data communication that depends on electronic
CAPACITORS
Capacitors act like gates or filters. They can be used for energy storage, discharge,
filtering, and coupling. Capacitors are made of two or more conducting plates separated
by an insulator (dielectric). The second most commonly used type of electronic
component after the resistor, they are found in most kinds of electronic equipment, from
consumer products to medical instruments and avionics.
Tantalum (Solid) Capacitors (cid:1) Tantalum (Wet) Capacitors (cid:1) Ceramic Capacitors (cid:1) Film Capacitors (cid:1) Aluminum Capacitors
Worldwide Communications Equipment
and Services Forecast
US Dollars in Millions
$1,400,000
$1,486,405
$1,386,446
$1,272,911
$1,200,000
$1,161,525
$1,054,370
$1,000,000
$800,000
$600,000
$400,000
$200,000
s
t
n
e
n
o
p
m
o
C
f
o
e
l
a
S
0
1999
2000
2001
Year
2002
2003
Source: Dataquest, April 2000
s
t
n
e
n
o
p
m
o
C
e
v
i
s
s
a
P
f
o
r
e
b
m
u
N
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Global Usage of Passive Components in
Communications Equipment Market
Units in Millions
418,000
248,000
198,450
138,000
1999
2000
2001
Year
2002
2003
These applications also use substantial numbers of
semiconductors, many of which are produced by Vishay.
10
Source: Paumanok Publications, March 2001
The growth of the global communications equipment market
fuels growing demand for Vishay semiconductors and
passive electronic components. Vishay components are used
in communications infrastructure, including base stations
that link satellites and phone users, PBX equipment, power
supplies, and routers. Corporations, Internet service
providers, and telecommunications companies use routers to
sort and direct data and voice communications, as well as
“streaming” audio and video delivered to PCs.
Also fueling demand for Vishay components is the growing
usage of cell phones, PDAs, pagers, and other wireless
devices. According to information published in 2001, over
400 million mobile phones were purchased during the year
2000. Some sources estimate that this figure could rise to
one billion by 2003 and even higher by 2004.*
increase from 170 million in 2000 to over 1.3 billion in
2004.** Access devices are expected to include phones with
text display capabilities, PDAs from Palm and other
companies, and wireless Internet appliances.
Electronic devices, such as MP3 players, for digital audio
recording and playback, digital cameras, digital set-top
boxes, and video game consoles sometimes blur the
distinction between entertainment and communication.
These devices, which continue to become more sophisti-
cated and more widespread, rely on types of components
* Upside magazine, March 2001; Vishay estimates
** Cahners In-Stat Group, 2000
312,700
persons worldwide who subscribe to data services will
Another industry study estimates that the number of
MAGNETICS
Inductors, which have cores that create magnetic fields when current is applied to them,
belong to a category of components called magnetics. They are often referred to as AC
resistors or chokes. Inductors are used to control AC current and voltage. For example,
they can be used to filter electronic noise, because they allow low frequency current to
pass while blocking unwanted, higher frequency signals.
Inductors
Custom Magnetics (cid:1) Inductors (cid:1) Transformers
11
11
Video game controllers include types of components manufactured by Vishay.
made by Vishay. Global production of video game consoles is
forecast to reach almost 44 million units by 2004, with an
estimated semiconductor content value of $104 per unit.*
The growing information appliance market is another factor
in electronic component usage. Worldwide production of
information appliances is projected to increase dramatically
from 1.8 million units in 1999 to 391 million units in 2003.
Worldwide revenues for information appliances are forecast
to grow from $497 million in 1999 to $91 billion in 2003.*
* Vishay estimates
DIODES
Usage of PDAs and other
wireless devices helps to fuel
demand for Vishay components.
Diodes are semiconductors that consist of a positive terminal (anode) and a negative
terminal (cathode). They act like gates, blocking electrical current up to a certain volt-
age in one direction, and letting it pass in the other direction. Hence, they produce DC
output from an AC input. For example, a type of high current diode is used in a clock
radio to change the AC voltage from a wall outlet to a specific DC voltage.
Small Signal Diodes (cid:1) Zener Diodes (cid:1) Rectifiers (cid:1) Transient Voltage Suppressors
COMPUTER MARKET
Vishay semiconductors and passive components enable more
and more features to be packaged in new generations of
smaller and lighter computers.
Global Usage of Passive Components in
Computer Market
Units in Millions
343,000
311,000
282,000
262,000
217,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
s
t
n
e
n
o
p
m
o
C
e
v
i
s
s
a
P
f
o
r
e
b
m
u
N
Vishay components can be found in nearly every computer
subsystem, including the motherboard, monitor, keyboard,
mouse, graphics card, internal and external disk drives,
PCMCIA card, and modem — as well as in printers, fax
machines, and copy machines. Despite a projected slow-
down for the year 2001 in the overall growth rate of
personal computer (PC) sales, faster computer processing
speeds and increasing complexity drive growing demand for
Vishay components.
A microprocessor is a complex integrated circuit (IC)
located on a computer’s motherboard that does all the
calculations and coordinates all the computer’s activities.
The microprocessor and other electronic circuits make up
the central processing unit, or CPU. Each new generation of
0
1999
2000
2001
Year
2002
2003
PCs features faster microprocessing speeds. In 1995, a
These applications also use substantial numbers of
semiconductors, many of which are produced by Vishay.
speed of 200 megahertz (200 million cycles per second) was
considered fast. The 1-gigahertz (one billion cycles per
Source: Paumanok Publications, March 2001
second) PC, which set a new standard for microprocessing
speed, is now being surpassed by even faster PCs.
12
TRANSISTORS
Power MOSFETs act as switches that turn circuits on or off or adjust voltage. They are
semiconductor devices made up of many individual transistors (as many as one million)
on one piece of silicon. Power MOSFETs prevent components from heating up and
conserve power. They are used in cell phones, PDAs, and other battery-operated
Power MOSFETs
products, as well as computers and some automotive applications.
Power MOSFETs (cid:1) Small Signal FETs (cid:1) RF Transistors (cid:1) MOSMICs
1313
Each increase in microprocessing speed requires a greater number of
supporting passive components. Intel’s 486 microprocessor, which
required 124 supporting passive components, was succeeded by
Intel’s Pentium® processor, which required 252 passive components,
the Pentium II, which required 345 passive components, and the
Pentium III, which requires 440 supporting passive components. The
even more powerful Pentium 4 requires a greater number of support-
ing passive components. Each of these computers, of course, also uses
many discrete semiconductors.
Vishay semiconductors increase efficiency and extend battery life in
notebook computers. Together with Vishay passive components, they
enable more and more features to be packaged in new generations of
smaller and lighter computers.
A wide variety of Vishay passive and active components are used in computers and
peripherals.
POWER ICS
Power integrated circuits (ICs) are semiconductor devices that control, regulate, or
switch power. They are used for the conversion, management, and interface requirements
of power systems, as well as motor control in products ranging from disc drives to water
pumps. Power ICs are found in laptop and desktop computers, automotive instrumenta-
tion, industrial controls, and wireless communications devices.
AUTOMOTIVE ELECTRONICS MARKET
It is estimated that 90% of all future innovation in automobiles will be
driven by electronics. This involves a wide variety of functions and
systems that rely on passive and active electronic components.
Global Usage of Passive Components in
Automotive Electronics Market
Although projected annual vehicle sales growth has slowed
this year, the number of electronic components per vehicle
continues to increase. This results from the replacement of
mechanical functions by sophisticated electronic circuits, as
well as increased use of advanced safety, security, climate
control, entertainment, and communication systems in
Units in Millions
156,000
158,000
147,000
179,000
168,000
automobiles.
It is estimated that 90% of all future innovation in
automobiles will be driven by electronics.* This involves a
wide variety of functions and systems that rely on passive
and active electronic components.
Innovations in automotive electronics include traction
control, electronic power steering, tank-leakage detection,
2002
2003
stability control, brake-by-wire, keyless entry, and more.
Many of these advances originated in technologies devel-
oped for the computer and communications markets, but
1999
2000
2001
Year
These applications also use substantial numbers of
semiconductors, many of which are produced by Vishay.
Source: Paumanok Publications, March 2001
their adaptation for cars and trucks involves a number of
challenges. In the automotive market, environmental ranges
and climate conditions are extreme, product life cycles are
relatively long, the cost of component repair is high, and
the reliability of components is crucial.
* Roland Berger & Partners GmbH, March 2000
s
t
n
e
n
o
p
m
o
C
e
v
i
s
s
a
P
f
o
r
e
b
m
u
N
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
14
IRDC
TRANSCEIVERS
Infrared data communications (IrDC), similar to the technology used in a television
remote control, links electronic devices without using cables. IrDC devices are
semiconductor-based modules that use a focused beam of light to emit and receive data
transmissions. IrDC ports enable wireless data transfer in notebook computers, cell
phones, PDAs, printers, and other products.
15
15
Innovations in Automotive Electronics
(partial list)
• Active body control
• Active stability control
• Brake assistance
• Brake-by-wire
• Cylinder shut-off
• Drive-by-wire
• Electromagnetic valve actuation
• Electronic power steering
• Gasoline direct injection
• Heads-up display
• Keyless entry
• Multifunction steering wheel
• Navigation system
• Parking assistant
• Remote diagnosis
• Steer-by-wire
• Tank leakage detection
• Traction control
• Voice recognition
• Window bags
• Xenon lights
It is estimated that electronics as a percentage of total
vehicle cost will increase from 25% in year 2000 to 29-33%
in 2005 and potentially 33-44% by 2010.* Despite a pro-
jected dip in year 2001 vehicle sales worldwide compared to
sales in 2000, increased reliance on complex electronic
subsystems drives growing demand for Vishay components.
* Roland Berger & Partners GmbH, March 2000
Vishay components are used in
most automotive subsystems.
OPTOELECTRONICS
The basic optoelectronic products are light-emitting diodes (LEDs) and photo-
detecting devices. They act as diodes, allowing current to flow in one direction. LEDs
generate a specific wavelength (color) of light, while photodetectors translate light
into electrical signals. They are used as light sources or data transmitters and
receivers in products ranging from home entertainment to industrial equipment.
Photo Detectors (cid:1) Infrared Emitters (cid:1) Optocouplers (cid:1) Optosensors (cid:1) Photo Modules (cid:1) LEDs (cid:1) Displays
INDUSTRIAL AND MEDICAL ELECTRONICS MARKET
All types of medical equipment, from CAT-
scan machines to pacemakers to hearing
aids, rely on electronic components.
By 2002, the worldwide semiconductor market for
instruments, medical equipment, and manufacturing
systems is expected to grow to more than $13 billion.
By 2002, the worldwide semiconductor market for instru-
were once confined to engineering labs. Devices for
ments, medical equipment, and manufacturing systems is
scanning price and product information, monitoring
expected to grow to more than $13 billion.* As product
inventory, and tracking shipments are becoming part of
development cycles become shorter, the ability of compo-
increasingly complex systems involving wireless communica-
nent suppliers to work with manufacturers during the design
tion and Web-based interaction between customers and
phase, and to solve subsystem problems such as power
vendors.
management and cordless connectivity, is becoming ever
more critical.
In the medical electronics area, miniaturization is being
driven by the trend towards minimally invasive therapies
Vishay components are found in many different types of
such as laparoscopic surgery and by the growing importance
test, measurement, and instrumentation systems, which are
of home care. Vishay components are used in pacemakers
16
becoming increasingly complex and versatile. For example,
and other implantable medical devices, where reliable, long-
handheld oscilloscopes and digital multimeters are giving
term performance is essential, as well as in hearing aids and
test and measurement professionals on-site capabilities that
a wide variety of other devices.
* Dataquest, January 1999
INTEGRATED
COMPONENTS
Integrated components contain multiple parts in a single package. Categories include
groupings of a single type of component in one surface-mounted package (arrays);
groupings of more than one type of component (networks); and integrated passive and
active surface-mounted devices (IPADs). An integrated component, when used to replace
several individual components, can save space and decrease costs.
MILITARY AND AEROSPACE EQUIPMENT MARKET
17
Every component Vishay provides for the military and aerospace
market is backed by comprehensive testing and failure analysis
facilities, and by an experienced technical staff.
Vishay maintains a long-term commitment to military and
for the military and aerospace market is backed by compre-
aerospace customers. Vishay components used in military
hensive testing and failure analysis facilities, and by an
and aerospace equipment are designed to function reliably
experienced technical staff.
when subjected to extremely hot and cold temperatures,
intense vibration, and other environmental stresses.
The worldwide market for military and aerospace equipment
is expected to grow by $11.5 billion from 1997 to 2002.*
In addition, Vishay has the ability to custom-design and
However, demand for electronics for some systems will grow
produce components to meet the high expectations of
more quickly. Military and civil aerospace semiconductor
quality and reliability demanded by military and aerospace
demand, for example, is projected to grow by 5.4% annually
customers. Vishay produces custom components for
to almost $3.4 billion during the same period,* as the
applications as diverse as missile systems and ground-based
electronics content for new systems and system upgrades
communication systems. Every component Vishay provides
rises.
* Dataquest, January 1999
Vishay products are used in spacecraft,
airplanes, satellites, and military equipment.
ANALOG
SWITCHES
Analog Switches (cid:1) Multiplexers
An analog switch is an integrated circuit that switches (or gates) analog electrical
signals. A basic configuration includes an analog input, a load to which the analog
signal is to be connected, and a control signal for turning the switch on and off. High-
voltage analog switches are found in instrumentation and measurement equipment. Low-
voltage analog switches are found in portable devices including cell phones and PDAs.
TECHNOLOGICAL INNOVATION
As a company founded four decades ago to manufacture
and market innovative products, Vishay remains firmly
committed to research and development (R&D).
Vishay scientists and engineers focus on bringing to market new manufacturing techniques, new packaging methods, and new
products and technologies that lead to better and more advanced end products. Some examples of recent technological innovation
include:
• New zero TCR Bulk Metal® foil resistors, ultra-precision aerospace and instrumentation compo-
nents that are unaffected by temperature changes and outperform all other types of resistors
available;
• Power Metal Strip® resistors, surface-mount components that are extremely efficient at handling
the flow of electricity in phones, computers, cars, and other end products;
• Manufacturing techniques for lowest-in-industry-ESR polymer tantalum capacitors that perform at
very high frequencies;
• TrenchFET® technology that increases transistor density to 178 million cells per square inch (the
highest in the industry), providing the lowest on-resistance and enabling advanced power
handling in cell phones and the communications infrastructure powering the Internet;
• MICRO FOOT™ chip-scale power MOSFETs that are 70% smaller and 50% thinner than previous
generations of MOSFETs, making possible the production of smaller and more feature-packed
handheld devices;
• Four-megabyte IrDC devices that offer the fastest infrared transmission available, enabling
18
18
efficient wireless data transfer between PDAs, computers, and other consumer products; and
• DC-to-DC converter FunctionPAK, an integrated passive and active device that decreases space
requirements on printed circuit boards and improves product performance.
There are many other examples of technological advances from Vishay that have made possible end products in all major markets
that are smaller, faster, more reliable, more advanced, and better able to serve customer needs. In the year 2000, Vishay intro-
duced over 200 new products.
Vishay’s mix of high tech products, specialty products, and commodity products protects the Company from drops in customer
demand for any one type of component, and thus helps Vishay’s bottom line. Vishay’s product mix also gives customers the
benefit of one-stop shopping for virtually all of their discrete electronic component needs.
Consolidated Statements Of Operations
VISHAY INTERTECHNOLOGY, INC.
19
(In thousands, except per share and share amounts)
2000
1999
1998
Year ended December 31
Net sales .....................................................................
$ 2,465,066
$
1,760,091
$ 1,572,745
Costs of products sold ..................................................
1,459,784
1,299,705
1,189,107
GROSS PROFIT ..........................................................
1,005,282
460,386
383,638
Selling, general, and administrative expenses ................
Amortization of goodwill ..............................................
Unusual items ..............................................................
Purchased research and development .............................
297,315
11,469
—
—
254,282
12,360
—
—
234,840
12,272
29,301
13,300
Other income (expense):
Interest expense ......................................................
Other ......................................................................
(25,177)
18,904
(53,296)
(5,737)
(49,038)
(2,241)
696,498
193,744
93,925
(6,273)
(59,033)
(51,279)
Earnings before income taxes and minority interest ........
Income taxes ...............................................................
Minority interest ..........................................................
NET EARNINGS ..........................................................
Basic earnings per share ...............................................
Diluted earnings per share ............................................
690,225
148,186
24,175
517,864
3.83
3.77
$
$
$
$
$
$
134,711
36,940
14,534
83,237
0.66
0.65
$
$
$
42,646
30,624
3,810
8,212
0.07
0.07
Weighted average shares outstanding:
Basic .......................................................................
135,295,000
126,678,000
126,665,000
Diluted ....................................................................
137,463,000
128,233,000
126,797,000
See accompanying notes.
VISHAY INTERTECHNOLOGY, INC.
20
Consolidated Balance Sheets
(In thousands, except per share and share amounts)
December 31
2000
1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .......................................................
$
337,213
$
105,193
Accounts receivable, less allowances of $12,630 and $9,495 ......
452,579
320,978
Inventories:
Finished goods ....................................................................
Work in process ...................................................................
Raw materials ......................................................................
Deferred income taxes .............................................................
Prepaid expenses and other current assets ................................
179,286
130,682
215,894
32,051
127,169
144,645
131,951
121,704
35,119
67,159
TOTAL CURRENT ASSETS ................................................................
1,474,874
926,749
PROPERTY AND EQUIPMENT — at cost:
Land .......................................................................................
Buildings and improvements ....................................................
Machinery and equipment ........................................................
Construction in progress ..........................................................
Less allowances for depreciation ..............................................
47,625
265,311
51,453
261,528
1,168,241
1,073,556
83,768
61,881
1,564,945
(591,391)
1,448,418
(517,873)
973,554
930,545
GOODWILL ..................................................................................
295,759
399,970
OTHER ASSETS .............................................................................
39,471
66,517
TOTAL ASSETS .............................................................................
$ 2,783,658
$ 2,323,781
VISHAY INTERTECHNOLOGY, INC.
21
December 31
2000
1999
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks ............................................................
$
8,250
$
26,790
Trade accounts payable ............................................................
Payroll and related expenses ....................................................
Other accrued expenses ...........................................................
Income taxes ..........................................................................
Current portion of long-term debt ............................................
120,070
111,132
146,157
31,915
150
101,613
77,209
107,724
4,818
4,445
TOTAL CURRENT LIABILITIES ........................................................
417,674
322,599
LONG-TERM DEBT — less current portion .......................................
140,467
656,943
DEFERRED INCOME TAXES .............................................................
DEFERRED INCOME .......................................................................
MINORITY INTEREST .....................................................................
OTHER LIABILITIES ......................................................................
79,109
55,162
63,480
93,157
62,712
50,462
61,637
47,315
ACCRUED PENSION COSTS .............................................................
100,754
108,521
STOCKHOLDERS' EQUITY:
Preferred Stock, par value $1.00 per share:
authorized — 1,000,000 shares; none issued
Common Stock, par value $.10 per share:
authorized — 150,000,000 shares; 122,408,402 and
111,468,463 shares outstanding after deducting
225,673 and 25,673 shares in treasury ..................................
12,241
11,147
Class B convertible Common Stock, par value $.10 per share:
authorized — 20,000,000 shares; 15,518,546 and
15,554,898 shares outstanding after deducting
279,453 shares in treasury ...................................................
Capital in excess of par value ...................................................
Retained earnings ...................................................................
Unearned compensation ...........................................................
Accumulated other comprehensive loss .....................................
1,552
1,319,426
615,455
(1,248)
(113,571)
1,556
985,393
97,591
(1,086)
(81,009)
TOTAL STOCKHOLDERS' EQUITY ......................................................
1,833,855
1,013,592
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................
$ 2,783,658
$ 2,323,781
See accompanying notes.
VISHAY INTERTECHNOLOGY, INC.
22
Consolidated Statements Of Cash Flows
(In thousands)
OPERATING ACTIVITIES
Net earnings ................................................................
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization ..............................
(Gain) loss on sale of subsidiaries .........................
Loss on disposal of property and equipment ...........
Minority interest in net earnings of consolidated
subsidiaries ......................................................
Equity in earnings of affiliate ................................
Purchased research and development .....................
Asset impairment losses ........................................
Loss on forward exchange contract ........................
Changes in operating assets and liabilities, net of
effects of businesses acquired or sold:
Accounts receivable .....................................
Inventories .................................................
Prepaid expenses and other current assets ....
Accounts payable ........................................
Other current liabilities ...............................
Other ...................................................................
Year ended December 31
2000
1999
1998
$ 517,864
$ 83,237
$ 8,212
140,840
(5,851)
2,320
24,175
2,577
—
—
—
(148,414)
(140,084)
(62,687)
28,507
106,084
76,988
139,676
10,073
1,146
14,534
2,195
—
—
—
(72,776)
25,998
14,451
15,838
24,146
(18,971)
127,947
—
712
3,810
1,084
13,300
23,057
(5,295)
13,827
13,304
(23,206)
1,575
(36,542)
27,665
NET CASH PROVIDED BY OPERATING ACTIVITIES ..............
542,319
239,547
169,450
INVESTING ACTIVITIES
Purchases of property and equipment ............................
Purchases of businesses ................................................
Net cash proceeds from divestitures ..............................
Proceeds from sale of property and equipment ...............
(229,781)
(42,384)
33,162
7,267
(119,638)
—
9,118
7,934
(151,682)
(423,031)
—
11,650
NET CASH USED IN INVESTING ACTIVITIES ......................
(231,736)
(102,586)
(563,063)
FINANCING ACTIVITIES
Net (payments) proceeds on revolving credit lines .........
Proceeds from long-term borrowings ..............................
Principal payments on long-term debt ...........................
Purchase of treasury stock ............................................
Proceeds from sale of common stock .............................
Proceeds from stock options exercised ...........................
Net changes in short-term borrowings ...........................
Net cash (used in) provided by financing activities ........
Effect of exchange rate changes on cash .......................
Increase (decrease) in cash and cash equivalents ...........
Cash and cash equivalents at beginning of year .............
(506,686)
—
(385)
(5,765)
395,449
39,873
39
(77,475)
(1,088)
232,020
105,193
(143,496)
197
(4,481)
—
—
—
6,752
(141,028)
(4,469)
(8,536)
113,729
462,214
5,030
(7,068)
—
—
—
(9,768)
450,408
1,671
58,466
55,263
CASH AND CASH EQUIVALENTS AT END OF YEAR ...............
$ 337,213
$ 105,193
$ 113,729
See accompanying notes.
Consolidated Statements Of Stockholders' Equity
VISHAY INTERTECHNOLOGY, INC.
23
(In thousands, except share amounts)
Class B
Convertible
Common
Stock
Capital in
Excess of
Par Value
Common
Stock
Retained
Earnings
Unearned
Compensation
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stock-
holders’
Equity
Balance at December 31, 1997
Net earnings
Foreign currency translation adjustment
Pension liability adjustment
$ 10,587
—
—
—
Comprehensive income
Stock issued (116,664 shares)
Stock dividends (5,296,314; 743,007 shares)
Conversions from Class B to common
(20 shares)
Tax effects relating to stock plan
Amortization of unearned compensation
Balance at December 31, 1998
Net earnings
Foreign currency translation adjustment
Pension liability adjustment
Comprehensive income
Stock issued (46,511 shares)
Stock options exercised (87,819 shares)
Conversions from Class B to common
(42,206 shares)
Tax effects relating to stock plan
Amortization of unearned compensation
12
530
—
—
—
11,129
—
—
—
5
9
4
—
—
$ 1,486 $ 914,531 $ 75,587
8,212
—
—
—
—
—
—
—
—
$ (644)
—
—
—
$ (41,899)
—
38,174
(4,074)
$ 959,648
8,212
38,174
(4,074)
—
74
—
—
—
1,050
68,841
—
(69,445)
(1,062)
—
—
(16)
—
—
—
—
1,560
—
—
—
984,406
—
—
—
14,354
83,237
—
—
—
—
(4)
—
—
503
482
—
2
—
—
—
—
—
—
42,312
—
—
—
(16)
575
1,002,519
83,237
(76,553)
3,343
10,027
—
491
—
2
553
—
—
—
—
—
(7,799)
—
(76,553)
3,343
—
—
—
—
—
—
—
575
(1,131)
—
—
—
(508)
—
—
—
553
Balance at December 31, 1999
Net earnings
Foreign currency translation adjustment
Pension liability adjustment
11,147
—
—
—
1,556
—
—
—
985,393
—
—
—
97,591
517,864
—
—
(1,086)
—
—
—
(81,009)
—
(32,468)
(94)
1,013,592
517,864
(32,468)
(94)
Comprehensive income
Stock issued (53,716 shares)
Stock options exercised (2,656,171 shares)
Conversions from Class B to common
(36,347 shares)
Common stock repurchase (200,000 shares)
Sale of common stock (8,392,500 shares)
Termination of Lite-On stock appreciation
rights
Tax effects relating to stock plan
Amortization of unearned compensation
5
266
4
(20)
839
—
—
—
—
—
(4)
—
—
—
—
—
1,699
39,607
—
(5,745)
394,610
(108,495)
12,357
—
—
—
—
—
—
—
—
—
(1,704)
—
—
—
—
—
—
1,542
485,302
—
39,873
—
(5,765)
395,449
(108,495)
12,357
1,542
—
—
—
—
—
—
—
—
Balance at December 31, 2000
$ 12,241
$ 1,552
$ 1,319,426
$ 615,455
$ (1,248)
$ (113,571)
$ 1,833,855
See accompanying notes.
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
24
Vishay Intertechnology, Inc. is an international manufacturer
and supplier of passive and active electronic components, particu-
larly resistors, capacitors, power MOSFETS, power conversion and
motor control integrated circuits, transistors and diodes. Electronic
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 include the accounts of
Vishay Intertechnology, Inc. and its majority-owned subsidiaries,
after elimination of all significant intercompany transactions, ac-
counts, and profits. The Company’s investments in 20%- to 50%-
owned companies are accounted for on the equity method. Invest-
ments in other companies are carried at cost.
Revenue Recognition
The Company recognizes revenue when products are shipped
to customers. The Company has agreements with distributors that
provide limited rights of return and protection against price reduc-
tions initiated by the Company. The effect of these programs is
estimated based on historical experience and provisions are recorded
at time of shipment.
Shipping and Handling Costs
Shipping and handling costs are included in costs of products
sold.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States re-
quires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying
notes. Actual results could differ significantly 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. Depre-
ciation of capital lease assets is included in total depreciation
expense. Depreciation expense was $126,285,000, $125,847,000,
and $114,592,000 for the years ended December 31, 2000, 1999, and
1998, respectively.
Construction in Progress
The estimated cost to complete construction in progress at
December 31, 2000 was $64,485,000.
Goodwill
Goodwill (excess of purchase price over net assets acquired)
is amortized principally over periods ranging from 20-40 years using
the straight-line method. 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 determine whether impair-
ment exists on the basis of undiscounted expected future cash flows
from operations before interest for the remaining amortization
period. If impairment exists, goodwill will be reduced by the
estimated shortfall of discounted cash flows. Accumulated amortiza-
tion amounted to $60,061,000 and $57,071,000 at December 31,
2000 and 1999, respectively.
Cash Equivalents
Cash and cash equivalents includes demand deposits and all
highly liquid investments with maturities of three months or less
when purchased.
Research and Development Expenses
The amount charged to expense for research and development
(exclusive of purchased in-process research and development) ag-
gregated $37,103,000, $35,038,000, and $28,857,000 for the years
ended December 31, 2000, 1999, and 1998, respectively. The Com-
pany spends additional amounts for the development of machinery
and equipment for new processes and for cost reduction measures.
Grants
Grants received by certain foreign subsidiaries from foreign
governments, 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 from the
Israeli government recognized as a reduction of costs of products
sold were $15,721,000, $14,256,000, and $13,116,000 for the years
ended December 31, 2000, 1999, and 1998, respectively. Grants
receivable of $23,792,000 and $10,056,000 are included in other
current assets at December 31, 2000 and 1999, respectively. De-
ferred grant income was $55,162,000 and $50,462,000 at Decem-
ber 31, 2000 and 1999, respectively. The grants are subject to
certain conditions, including maintaining specified levels of em-
ployment for periods up to ten years. Noncompliance with such
conditions could result in the repayment of grants. However, man-
agement expects that the Company will comply with all terms and
conditions of the grants.
Minority Interest
Minority interest represents the ownership interests of third
parties in the net assets and results of operations of certain
consolidated subsidiaries.
Share and Per Share Amounts
On June 9, 2000 and June 22, 1999, the Company effected
three-for-two and five-for-four splits, respectively, of the shares of
Common Stock and Class B Common Stock. Accordingly, all share and
per share amounts shown in the accompanying consolidated finan-
cial statements and notes have been retroactively adjusted to reflect
these stock splits.
Earnings per share amounts for all periods presented also
reflect a 5% stock dividend paid on June 11, 1998.
Stock-Based Compensation
Statement of Financial Accounting Standards No. 123, Ac-
counting for Stock-Based Compensation (SFAS 123), encourages
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
25
VISHAY INTERTECHNOLOGY, INC.
entities to record compensation expense for stock-based employee
compensation plans at fair value but provides the option of measur-
ing compensation expense using the intrinsic value method pre-
scribed in Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees (APB 25). The Company accounts for
stock-based compensation in accordance with APB 25. Note 10
presents pro forma results of operations as if SFAS 123 had been used
to account for stock-based compensation plans.
Derivative Financial Instruments
The Company uses interest rate swap agreements for purposes
other than trading and treats such agreements as off-balance-sheet
items. Interest rate swap agreements are used by the Company to
modify variable rate obligations to fixed rate obligations, thereby
reducing the exposure to market rate fluctuations. The interest rate
swap agreements are designated as hedges, and effectiveness is
determined by matching the principal balances and terms with each
specific obligation. Such an agreement involves the exchange of
amounts based on fixed interest rates for amounts based on variable
interest rates over the life of the agreement without an exchange of
the notional amount upon which payments are based. The differen-
tial to be paid or received as interest rates change is accounted for
on the accrual method of accounting. The related amount payable to
or receivable from counterparties is included as an adjustment to
interest expense and to accrued interest in other accrued expenses.
Gains and losses upon terminations of interest rate swap agreements
are deferred as an adjustment to interest expense related to the
obligations over the term of the original contract lives of the
terminated swap agreements. In the event of early extinguishment
of an obligation, any realized or unrealized gain or loss from the
swap is recognized in income at the time of extinguishment.
Foreign currency forward exchange contracts are used in
certain instances to manage the effect of exchange rate changes on
actual cash flows from foreign currency denominated transactions.
Foreign currency forward exchange contracts designated as effective
hedges of firm commitments are treated as hedges for accounting
purposes. Gains and losses are deferred and recognized in income
when the hedged transaction occurs.
Accounting Pronouncements Pending Adoption
In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133, Ac-
counting
for Derivative Instruments and Hedging Activities
(SFAS 133). SFAS 133, as amended, establishes accounting and
reporting standards for derivative instruments and hedging activi-
ties. It requires entities to record all derivative instruments on the
balance sheet at fair value. Changes in the fair value of derivatives
are recorded in each period in current earnings or other comprehen-
sive income, based on whether a derivative is designated as part of
a hedge transaction and the type of hedge transaction. The ineffec-
tive portion of all hedges is recognized in earnings. The Company is
required to adopt SFAS 133, as amended, effective January 1, 2001.
Management anticipates that the adoption of SFAS 133 will have an
immaterial effect on the Company's financial position and results of
operations.
Commitments and Contingencies
Liabilities for loss contingencies, including environmental
remediation costs, arising from claims, assessments, litigation,
fines, penalties, and other sources are recorded when it is probable
that a liability has been incurred and the amount of the assessment
and/or remediation can be reasonably estimated. The costs for a
specific environmental cleanup site are discounted if the aggregate
amount of the obligation and the amount and timing of the cash
payments for that site are fixed or reliably determinable generally
based upon information derived from the remediation plan for that
site. Recoveries from third parties that are probable of realization
and can be reasonably estimated are separately recorded, and are not
offset against the related environmental liability.
Reclassifications
Certain prior-year amounts have been reclassified to conform
to the current financial statement presentation.
2. Acquisitions and Divestitures
During 2000, the Company acquired certain assets and as-
sumed certain liabilities of Spectrol Electronics Corporation and
Spectrol Electronics Limited and acquired 100% of the common stock
of Cera-Mite Corporation and of Electro-Films, Inc. The combined
cash purchase price was $42,384,000. The purchase price allocations
have been preliminarily estimated by management based upon
currently available information. The results of operations of Electro-
Films, Cera-Mite, and Spectrol have been included in the Company’s
results from June 1, 2000, August 1, 2000, and September 1, 2000,
respectively. Excess of cost over fair value of net assets acquired
($19,707,000) is being amortized over 20 years using the straight-
line method. The pro forma effect of these acquisitions was not
material for 2000 or 1999.
On May 31, 2000, the Company entered into a definitive
agreement for the sale of its 65% interest in Lite-On Power Semicon-
ductor Corporation (LPSC) to the Lite-On Group for $40,736,000 in
cash and the transfer to the Company of the rights under the SARs
(see Note 6) issued in July 1997. The fair value of the SARs was
$108,495,000 as of May 31, 2000. A pretax gain of $8,401,000 is
included in other income in connection with the sale of the
Company’s 65% interest in LPSC. The transaction was completed on
July 12, 2000.
On November 30, 2000, the Company sold V-Tech Latino
Americana LTDA, its Brazilian distribution subsidiary. In connection
with the sale, the Company received cash proceeds of approximately
$400,000 and recorded a noncash pretax loss of $2,550,000, which
is included in other income (expense).
On March 26, 1999, the Company sold Nicolitch, S.A., its
French manufacturer of printed circuit boards. In connection with
the sale, the Company received proceeds of approximately
$9,118,000 and recorded a noncash pretax loss of $10,073,000,
which is included in other income (expense).
On March 2, 1998, the Company purchased 80.4% of Siliconix
incorporated (NASDAQ:SILI) and 100% of TEMIC Semiconductor
GmbH (collectively, TEMIC) for a total of $549,889,000 in cash.
TEMIC is a producer of discrete active electronic components with
manufacturing facilities in the United States, the Far East, Germany,
and Austria. On March 4, 1998, the Company sold the Integrated
Circuits division of TEMIC to Atmel Incorporated for a total of
$105,755,000 in cash.
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
26
The purchase of TEMIC was funded from the Company’s $1.1
billion revolving credit facilities made available to Vishay on
March 2, 1998.
3. Unusual Items
Unusual items in 1998 consisted of the following components
(in thousands):
The TEMIC acquisition was accounted for under the purchase
method of accounting. Under purchase accounting, the assets and
liabilities of TEMIC were required to be adjusted from historical
amounts to their estimated fair values.
Management estimated that $13,300,000 of the TEMIC pur-
chase price represented purchased in-process technology that had
not reached technological feasibility and had no alternative future
use. Accordingly, this amount was expensed with no tax benefit upon
consummation of the acquisition. The value assigned to purchased
in-process technology was determined by identifying research
projects in areas for which technological feasibility had not been
established. The value was determined by estimating the costs to
develop the purchased in-process technology into commercially
viable products, estimating the resulting net cash flows from such
products, and discounting the net cash flows back to their present
value. The discount rate included a factor that took into account the
uncertainty surrounding the successful development of the pur-
chased in-process technology.
In connection with the TEMIC acquisition, the Company
recorded restructuring liabilities of $30,471,000 in connection with
an exit plan that management began to formulate prior to the
acquisition date. Approximately $25,197,000 of these liabilities
related to employee termination costs covering 498 technical,
production, administrative and support employees located in the
United States, Europe, and the Pacific Rim. The remaining
$5,274,000 related to provisions for contract cancellations and other
costs. As of December 31, 2000, the restructuring plan was com-
pleted.
The results of operations of TEMIC have been included in the
Company's results from March 1, 1998. Excess of cost over the fair
value of net assets acquired ($154,866,000) is being amortized
principally over periods ranging from 30-40 years using the straight-
line method.
Had the TEMIC acquisition been made at the beginning of
1998, the Company’s pro forma unaudited results for the year ended
December 31, 1998 would have been (in thousands, except per share
amounts):
Year ended December 31
Net sales .......................................................
Net earnings ..................................................
Basic and diluted earnings per share ...............
1998
$ 1,655,197
6,528
0.05
The pro forma results include adjustments for interest expense
that would have been incurred to finance the acquisitions, additional
depreciation based on the fair value of property, plant, and equip-
ment acquired, writeoff of purchased in-process research and devel-
opment, amortization of goodwill, and related tax effects.
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 the period presented.
Impairment losses:
China .......................................................
Nikkohm ...................................................
Restructuring of European operations .............
Closing of two U.S. sales offices .....................
$
1998
19,556
3,501
5,944
300
$
29,301
In May 1996, the Company signed letters of intent with the
China National Non-Ferrous Metals Industry Corporation Nanchang
Branch (the CNNC) and United Development, Inc. to enter into joint
ventures to mine, process and refine tantalum at a site in China and
to build a plant in China to manufacture dipped radial and chip
tantalum capacitors. Management viewed this as a strategic invest-
ment as it would provide the Company with a presence in the Far East,
another source of low-cost labor, and a stable, low-cost supply of
tantalum. Through March 31, 1998, the Company continued to
negotiate the terms of the joint ventures with the CNNC and to
conduct feasibility tests on the mine. As of March 31, 1998, the
Company had removed from existing production lines and packaged
for shipment to China $18.9 million of equipment to be used in the
manufacture of dipped radial and chip tantalum capacitors at the
proposed plant. In addition, the Company had deferred $1.7 million
in consulting costs incurred in evaluating the potential joint ven-
ture. During fiscal 1998, several events occurred which led to the
eventual abandonment of the projects in China. First, the CNNC was
disbanded by the Chinese government and replaced by a smaller
organization with much less control over the various potential
Chinese partners in the joint ventures. The individual Chinese
partners, no longer under the central control of the CNNC, began
demanding renegotiations of the joint venture agreements in ways
that were unacceptable to the Company. Second, the Asian economy
experienced a significant downturn and demand for the Company’s
tantalum capacitors dropped significantly. The reduction in demand
for the Company’s tantalum capacitors made the building of a large
factory financially impractical. Instead, the Company downsized its
plans and opened a small finishing plant for tantalum capacitors in
one of the Company’s existing Shanghai facilities that it had acquired
in 1997. Third, suppliers of tantalum outside of China were forced to
lower prices due to a significant increase in supply primarily due to
competition from Chinese suppliers. Fourth, in 1997 and 1998,
Vishay acquired two companies that had established facilities in
China with approximately 2,000 employees in five factories. These
factories served to establish Vishay as a major components manufac-
turer in China without additional investment by the Company. During
the fourth quarter of fiscal 1998, management evaluated the pro-
posed joint ventures and concluded that, due to the factors described
above, the Company would discontinue negotiations and abandon
the proposed joint ventures. Management concluded that the $18.9
million of equipment had a net realizable value of $1 million and that
the $1.7 million of deferred costs were not recoverable and in
accordance with the Company’s accounting policy, recorded an
impairment loss of $19.6 million.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
27
VISHAY INTERTECHNOLOGY, INC.
In March 1995, the Company acquired a 49% interest in
Nikkohm, a Japanese manufacturer and distributor of passive elec-
tronic components. The Company’s investment in Nikkohm totaled $4
million. Like the proposed Chinese joint ventures, management
considered its investment in Nikkohm strategic because it provided
the Company with an entry into certain Far East markets. Following
the acquisition of its interest, Vishay worked with the management
of Nikkohm to build Nikkohm’s business and improve its profitability.
Through December 31, 1997, the Company recognized a cumulative
loss on its investment in Nikkohm of $499,800 (1995 – $304,000;
1996 – $141,800; 1997 – $54,000). Management had been encour-
aged by Nikkohm’s trend in earnings and had proposed certain
marketing programs intended to further improve operating results.
However, Nikkohm’s results of operations began to deteriorate in
fiscal 1998 due to a decrease in demand for the Company’s products,
particularly thin film resistors, and a downturn in the Asian economy.
In addition, a significant member of Nikkohm’s management re-
signed due to health concerns. Also, the Company’s acquisitions in
1997 and 1998 had established Vishay as a major electronics
components manufacturer in the Far East. During the fourth quarter
of fiscal 1998, management evaluated these developments and
concluded that the carrying amount of the investment in Nikkohm
was not recoverable and in accordance with the Company’s account-
ing policy, recorded an impairment loss of $3.5 million.
Restructuring of European operations includes $5,694,000 of
employee termination costs covering approximately 182 technical,
production, administrative and support employees located in Ger-
many and the United Kingdom. The remaining $250,000 relates to
lease buyout expense associated with the closing of a facility in the
United Kingdom. At December 31, 1998, approximately 15 employ-
ees had been terminated and $471,000 of termination costs were
paid. During the year ended December 31, 1999, the Company
terminated the remainder of the employees and paid related termi-
nation costs of $4,899,000. At December 31, 1999, the 1998 Euro-
pean operations restructuring plan was completed.
The remaining $300,000 of restructuring expense consists of
employee termination costs of $130,000 and lease buyout and other
expenses of $170,000 relating to the closing of two U.S. sales
offices. During the year ended December 31, 1999, these sales
offices were closed and the restructuring costs were paid.
4. Income Taxes
Significant components of income taxes are as follows (in
thousands):
Year ended December 31
2000
1999
1998
Current:
U.S. Federal .............
Foreign ....................
State .......................
$ 51,965
11,936
4,744
$
1,685
6,810
728
$
1,590
12,370
987
68,645
9,223
14,947
Deferred:
U.S. Federal .............
Foreign ....................
State .......................
62,156
17,540
(155)
21,957
5,333
427
(44)
15,708
13
79,541
27,717
15,677
$ 148,186
$ 36,940
$ 30,624
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 pur-
poses. Significant components of the Company’s deferred tax assets
and liabilities are as follows (in thousands):
December 31
2000
1999
Deferred tax assets:
Pension and other retiree
obligations .............................
Net operating loss carryforwards ..
Tax credit carryforwards ...............
Restructuring reserves .................
Other accruals and reserves ..........
$ 18,393
32,406
2,143
3,412
32,595
$
26,447
84,387
8,236
4,981
32,385
Total deferred tax assets .................
Less: Valuation allowance ............
88,949
(19,658)
156,436
(47,648)
Net deferred tax assets ....................
69,291
108,788
Deferred tax liabilities:
Tax over book depreciation ..........
Other – net .................................
83,489
16,966
86,497
14,641
Earnings before income taxes and minority interest consists of
Total deferred tax liabilities ............
100,455
101,138
the following components (in thousands):
Net deferred tax assets (liabilities) ..
$ (31,164)
$
7,650
Year ended December 31
2000
1999
1998
Domestic .....................
Foreign .......................
$ 177,852
512,373
$ 26,717
107,994
$ (45,334)
87,980
$ 690,225
$ 134,711
$ 42,646
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
28
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
2000
1999
1998
5. Long-Term Debt
Long-term debt consists of the following (in thousands):
December 31
2000
1999
$ 241,579
$ 47,149
$ 14,926
credit loans ..............................
$ 140,000
$ 635,215
Multicurrency revolving
Tax at statutory rate ....
State income taxes,
net of U.S. federal
tax benefit ..............
Effect of foreign
3,064
606
649
operations ...............
(99,520)
(13,717)
(1,561)
Increase in valuation
allowance for foreign
net operating loss
carryforwards ...........
Purchased research
and development
expense ...................
Other ..........................
-
-
10,000
-
3,063
-
2,902
4,655
1,955
..................................
$ 148,186
$ 36,940
$ 30,624
At December 31, 2000, the Company had the following net
operating loss carryforwards for tax purposes (in thousands):
Germany ......................
France .........................
Portugal ......................
$ 85,899
4,456
4,375
Expires
No expiration
Unlimited
2002 – 2005
Approximately $38,472,000 of the carryforward in Germany
resulted from the Company’s acquisition of Roederstein, GmbH in
1993. Valuation allowances of $19,068,000 and $45,698,000 have
been recorded at December 31, 2000 and 1999, respectively, for
loss
deferred tax assets related to foreign net operating
carryforwards. In 2000 and 1999, respectively, tax benefits recog-
nized through reductions of the valuation allowance had the effect
of reducing goodwill of acquired companies by $2,693,000 and
$454,000. If additional tax benefits are recognized in the future
through further reduction of the valuation allowance, $7,925,000 of
such benefits will reduce goodwill.
At December 31, 2000, no provision had been made for U.S.
federal and state income taxes on approximately $892,141,000 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), state income
taxes, and withholding taxes payable to the various foreign coun-
tries. 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 $45,703,000, $5,463,000, and
$36,488,000 for the years ended December 31, 2000, 1999, and
1998, respectively.
Other debt and capital lease
obligations ...............................
617
26,173
Less current portion ......................
140,617
150
661,388
4,445
$ 140,467
$ 656,943
At December 31, 1999, two facilities were available under the
Company’s amended and restated loan agreements with a group of
banks: an $825,000,000 five-year multicurrency revolving credit
facility and a $100,000,000 364-day multicurrency revolving credit
facility.
On August 31, 2000, the Company amended the credit facili-
ties. The amended agreement provides for a $660,000,000 long-term
revolving credit and swing line facility which matures on
June 1, 2005, subject to the Company’s right to request year-to-year
renewals. Interest on the long-term facility is payable at prime or
other variable interest rate options. The Company is required to pay
facility fees on the long-term facility. As of December 31, 2000, the
Company had $140,000,000 outstanding under the long-term revolv-
ing credit facility (interest rate of 7.19%; 6.53% after giving effect
to interest rate swaps).
Borrowings under the loan agreement are secured by pledges
of stock in certain significant subsidiaries and certain guaranties by
significant subsidiaries. The credit facility restricts the Company
from paying cash dividends and requires the Company to comply with
other covenants, including the maintenance of specific financial
ratios.
Aggregate annual maturities of long-term debt are as follows:
2001 – $150,000; 2002 – $168,000; 2003 – $117,000; 2004 –
$116,000; and 2005 – $140,066,000.
At December 31, 2000, the Company had committed and
uncommitted short-term credit lines with various U.S. and foreign
banks aggregating $106,197,000, of which $97,947,000 was unused.
The weighted average interest rate on short-term borrowings out-
standing as of December 31, 2000 and 1999 was 6.57% and 7.07%,
respectively.
Interest paid was $29,930,000, $53,605,000,
and
$48,105,000 for the years ended December 31, 2000, 1999, and
1998, respectively.
6. Stockholders’ Equity
The Company’s Class B Common 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 convert-
ible on a one-for-one basis at any time into shares of Common Stock.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
29
VISHAY INTERTECHNOLOGY, INC.
In connection with repayments of debt, the Company termi-
nated $200,000,000 notional amount of interest rate swap agree-
ments (see Note 12) and recognized pretax gains of $8,919,000 in
2000.
During the year ended December 31, 2000, the Company sold
its 65% interest in LPSC and all of the assets of V-Tech Latino
Americana LTDA. The sale of LPSC resulted in a pretax gain of
$8,401,000 and the sale of V-Tech resulted in a pretax loss of
$2,550,000. During the year ended December 31, 1999, the Company
sold Nicolitch S.A. and recorded a pretax loss of $10,073,000 (see
Note 2).
In connection with the Company’s acquisition of TEMIC, the
Company entered into a forward exchange contract in December
1997. This contract was intended to protect against the impact of
fluctuations in the exchange rate between the U.S. Dollar and the
Deutsche Mark, since the purchase price was denominated in
Deutsche Marks and payable in U.S. Dollars. At December 31, 1997,
the Company had an unrealized loss on this contract of $5,295,000,
which resulted from marking the contract to market value. On
March 2, 1998, the forward exchange contract was settled and the
Company recognized an additional loss of $6,269,000.
The Company completed a public offering of its Common Stock
on May 15, 2000, selling 8,392,500 shares at a price of $49.00
(adjusted for the June 9, 2000 three–for–two stock split). The total
net proceeds to the Company from the offering, after deducting the
underwriting discount and estimated expenses, were approximately
$395,449,000. These proceeds were used to repay a portion of the
debt outstanding under its long-term revolving credit facility.
In connection with the Company’s acquisition of 65% of LPSC
in July 1997, the Company issued stock appreciation rights (“SARs”)
to the Lite-On Group (former owners of LPSC). The SARs represented
the right to receive, in stock, the increase in value on the equivalent
of 3,200,000 shares of the Company’s Common Stock, above $11.68
per share. On January 24, 2000, the Company exercised its right to
call the SARs. Based on the call price of $26.43 per share and the
average closing price of Vishay shares for the thirty days prior to
January 24, 2000, the Company would have had to issue 2,294,000
shares of Common Stock to settle the SARs. In connection with the
sale of its 65% interest in LPSC to the Lite-On Group (see Note 2), the
Lite-On Group transferred its rights under the SARs to Vishay.
On August 10, 2000, the Board of Directors of the Company
authorized the repurchase of up to 5,000,000 shares of its Common
Stock from time to time in the open market. As of December 31, 2000,
the Company had repurchased 200,000 shares for a total of
$5,765,000.
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, 2000, 305,126 shares were
available for issuance under stock plans.
7. Other Income (Expense)
Other income (expense) consists of the following (in
thousands):
Year ended December 31
2000
1999
1998
Foreign exchange
(losses) gains ..........
$ (7,305)
$
86
$
495
Loss on forward
exchange contract ....
Interest income ...........
Equity in net income
-
9,652
-
3,968
(6,269)
4,687
of affiliates .............
2,577
2,195
1,084
Gain on termination of
interest rate swap
agreements ..............
Gains (losses) on sale
8,919
-
of subsidiaries .........
5,851
(10,073)
-
-
Loss on disposal of
property and
equipment ...............
Other ..........................
(2,320)
1,530
(1,179)
(734)
(712)
(1,526)
$ 18,904
$ (5,737)
$ (2,241)
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
30
8. Other Comprehensive Income
The income tax effects allocated to and the cumulative balance of each component of other comprehensive income (loss) are as follows
(in thousands):
Beginning
Balance
Before-Tax
Amount
Tax (Benefit)
Expense
Net-of-Tax
Amount
Ending
Balance
December 31, 2000
Pension liability adjustment ..................
Currency translation adjustment .............
December 31, 1999
Pension liability adjustment ..................
Currency translation adjustment .............
December 31, 1998
Pension liability adjustment ..................
Currency translation adjustment .............
$
$
$
$
(5,043)
(75,966)
$
1,258
(32,468)
$ (81,009)
$ (31,210)
(8,386)
587
$
6,177
(76,553)
(7,799)
$
(70,376)
(4,312)
(37,587)
$
(41,899)
$
$
(7,342)
38,174
30,832
$
$
$
$
$
$
1,352
-
1,352
2,834
–
2,834
3,268
–
3,268
$
(94)
(32,468)
$
(5,137)
(108,434)
$ (32,562)
$(113,571)
$
3,343
(76,553)
$
(5,043)
(75,966)
$
(73,210)
$
(81,009)
$
$
(4,074)
38,174
34,100
$
$
(8,386)
587
(7,799)
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
31
VISHAY INTERTECHNOLOGY, INC.
9. Pensions and Other Postretirement Benefits
The Company maintains several defined benefit pension and nonpension postretirement plans which cover substantially all full-time U.S.
employees. The following table sets forth a reconciliation of the benefit obligation, plan assets, and accrued benefit cost related to these plans
(in thousands):
Change in benefit obligation:
Benefit obligation at beginning of year ............
Service cost ....................................................
Interest cost ...................................................
Employee contributions ....................................
Actuarial losses (gains) ....................................
Plan amendments ............................................
Benefits paid ..................................................
Pension Benefits
2000
1999
Other Benefits
2000
1999
$ 104,447
2,528
7,858
2,067
6,152
-
(7,044)
$ 110,965
3,296
6,981
1,959
(11,690)
-
(7,064)
$ 7,331
225
545
-
104
314
(555)
$ 7,977
264
496
–
(849)
-
(557)
Benefit obligation at end of year ..........................
$ 116,008
$ 104,447
$ 7,964
$ 7,331
Change in plan assets:
Fair value of plan assets at beginning of year ....
Actual return on plan assets .............................
Company contributions ....................................
Plan participants’ contributions ........................
Benefits paid ..................................................
$ 99,440
2,982
5,473
2,067
(7,044)
$ 95,534
6,837
2,174
1,959
(7,064)
Fair value of plan assets at end of year ..................
$ 102,918
$ 99,440
Funded status ......................................................
Unrecognized net actuarial loss (gain) ..................
Unrecognized transition obligation (asset) ............
Unamortized prior service cost ..............................
$ (13,090)
15,772
(193)
8
$ (5,007)
4,455
(83)
75
$ (7,964)
(187)
2,322
732
$ (7,331)
(308)
2,779
248
Net amount recognized .........................................
$
2,497
$
(560)
$ (5,097)
$ (4,612)
Amounts recognized in the consolidated balance
sheets consist of:
Prepaid benefit cost .....................................
Accrued benefit liability ...............................
Net amount recognized .........................................
Weighted-average assumptions as of December 31:
Discount rate ...................................................
Expected return on plan assets ..........................
Rate of compensation increase ..........................
$
7,018
(4,521)
$
2,497
$
$
4,165
(4,725)
$
-
(5,097)
$
–
(4,612)
(560)
$ (5,097)
$ (4,612)
7.25%
8.50%–9.50%
4.50%
7.50%
8.50%–9.50%
4.50%
7.25%
7.50%
2000
Pension Benefits
1999
1998
2000
Other Benefits
1999
1998
Components of net periodic benefit cost:
Annual service cost ...............................
Less employee contributions ..................
$ 4,595
2,067
$ 5,255
1,959
$ 5,610
1,782
$
Net service cost ....................................
Interest cost .........................................
Expected return on plan assets ...............
Amortization of prior service cost ...........
Amortization of transition obligation .....
Amortization of (gains) losses ................
2,528
7,858
(8,703)
67
110
556
3,296
6,981
(8,259)
98
110
461
3,828
6,726
(8,463)
195
110
–
225
-
225
545
-
93
194
(17)
$
264
–
264
496
–
31
214
6
$
287
–
287
494
–
31
214
–
Net periodic benefit cost ...........................
$ 2,416
$ 2,687
$ 2,396
$ 1,040
$ 1,011
$ 1,026
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
32
The projected benefit obligation, accumulated benefit obliga-
tion, and fair value of plan assets for the pension plans with
accumulated benefit obligations in excess of plan assets were
$21,829,000, $21,355,000, and $15,899,000, respectively, as of
December 31, 2000
and
$15,401,000, respectively, as of December 31, 1999.
and $21,494,000, $21,380,000,
The projected benefit obligation, accumulated benefit obliga-
tion, and fair value of plan assets for the pension plans with
projected benefit obligations in excess of plan assets were
$116,008,000, $102,340,000, and $102,918,000, respectively, as of
December 31, 2000
and
$15,401,000, respectively, as of December 31, 1999.
and $21,494,000, $21,380,000,
The Company’s nonpension postretirement plan is funded as
costs are incurred. The plan is contributory, with employee contribu-
tions adjusted for general inflation or inflation in costs under the
plan. The plan was amended in 1993 to cap employer contributions
at 1993 levels. The impact of a one-percentage-point change in
assumed health care cost trend rates on the net periodic benefit cost
and postretirement benefit obligation is immaterial.
Many of the Company’s U.S. employees are eligible to partici-
pate in 401(k) savings plans, some of which provide for Company
matching under various formulas. The Company’s matching expense
for the plans was $3,161,000, $3,196,000, and $2,816,000 for the
years ended December 31, 2000, 1999, and 1998, respectively.
The Company provides pension and similar benefits to employ-
ees of certain foreign subsidiaries consistent with local practices.
German subsidiaries of the Company have defined benefit pension
plans. The following table sets forth a reconciliation of the benefit
obligation, plan assets, and accrued benefit cost related to the
German plans (in thousands):
2000
1999
Change in benefit obligation:
Benefit obligation at beginning
of year ....................................
Service cost ................................
Interest cost ...............................
Actuarial (gains) losses ...............
Benefits paid ..............................
Foreign currency translation ........
$ 98,108
440
5,755
(915)
(4,871)
(7,969)
$ 111,770
554
6,501
(837)
(5,341)
(14,539)
Benefit obligation at end of year .....
$ 90,548
$
98,108
Change in plan assets:
Fair value of plan assets at
beginning of year ....................
Actual return on plan assets ........
Company contributions ................
Benefits paid ..............................
Foreign currency translation ........
Fair value of plan assets at end
$ 13,726
677
2,408
(2,514)
(880)
$
15,227
753
2,467
(2,574)
(2,147)
of year .......................................
$ 13,417
$
13,726
2000
1999
Funded status .................................
Unrecognized net actuarial losses ....
Unrecognized transition asset ..........
Unamortized prior service cost .........
$ (77,131)
4,347
(9)
58
$ (84,382)
5,650
(13)
103
Net amount recognized ....................
$ (72,735)
$ (78,642)
Amounts recognized in the
consolidated balance sheets
consist of:
Accrued benefit liability ..................
Accumulated other
$ (78,742)
$ (85,867)
comprehensive income .................
6,007
7,225
Net amount recognized ....................
$ (72,735)
$ (78,642)
Weighted-average assumptions
as of December 31:
Discount rate ............................
Rate of compensation increase ...
6.50%
3.00%
6.50%
3.00%
2000
1999
1998
Components of net
periodic benefit cost:
Service cost .........
Interest cost ........
Expected return
on plan assets ..
Amortization of
prior service
cost .................
Amortization of
transition
asset ...............
Amortization of
losses ..............
Net periodic benefit
cost .................
$
$
440
5,755
554
6,501
$
510
6,025
(440)
(488)
(476)
45
65
(4)
151
(6)
250
86
(2)
62
$
5,947
$
6,876
$
6,205
The projected benefit obligation, accumulated benefit obliga-
tion, and fair value of plan assets for the German pension plans with
accumulated benefit obligations and projected benefit obligations
in excess of plan assets were $90,548,000, $89,064,000, and
respectively, as of December 31, 2000 and
$13,417,000,
$98,108,000, $96,601,000, and $13,726,000, respectively, as of
December 31, 1999.
10. Stock Options
The Company has three stock option programs. Under the 1995
Stock Option Program, certain key executives of the Company were
granted options on March 19, 1995, to purchase 2,283,000 shares of
the Company’s Common Stock. The options were fully vested on the
date of grant and expired March 1, 2000, with one-third exercisable
at $12.21, one-third exercisable at $15.36, and one-third exercisable
at $21.94. As of December 31, 2000, 2,010,000 options have been
exercised under this plan and the remaining options have been
canceled.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
33
VISHAY INTERTECHNOLOGY, INC.
Under the 1997 Stock Option Program, certain executive officers, key employees, and consultants of the Company were granted options
on May 21, 1998, to purchase 2,687,000 shares of the Company’s Common Stock. The options were fully vested on the date of grant and expire
June 1, 2008, with one-third exercisable at $10.89, one-third exercisable at $12.53, and one-third exercisable at $13.61. As of Decem-
ber 31, 2000, 528,000 options have been exercised under this plan.
Under the 1998 Stock Option Program, certain executive officers and key employees were granted options as summarized in the following
table:
Date of Grant
# of Options
Exercise Price
Vesting
Expiration
October 6, 1998
October 8, 1999
August 4, 2000
October 12, 2000
1,598,000
1,334,000
50,000
1,114,000
$ 5.60
15.33
30.00
25.13
Evenly over 6 years
Evenly over 6 years
Evenly over 5 years, beginning August 4, 2003
Evenly over 6 years
March 16, 2008
October 8, 2009
August 4, 2010
October 12, 2010
On May 18, 2000, the stockholders of the Company approved an increase in the number of shares available for grant under Vishay’s 1998
Stock Option Program. As a result, the number of shares available for grant under this program increased from 2,953,500 to 4,453,500. As of
December 31, 2000, 206,000 options have been exercised under this plan.
The following table summarizes the Company’s stock option activity (options in thousands):
Outstanding at beginning of year ...............
Granted ....................................................
Exercised ..................................................
Forfeited ..................................................
Cancelled ..................................................
Outstanding at end of year ........................
Exercisable at end of year ..........................
Available for future grants .........................
2000
1999
1998
Number of
Options
7,493
1,164
(2,656)
—
(355)
5,646
2,651
760
Weighted
Average
Exercise
Price
$ 12.67
25.34
15.08
—
10.41
14.29
11.96
Weighted
Average
Exercise
Price
$ 11.96
15.33
5.60
—
6.05
12.67
13.83
Number of
Options
6,295
1,334
(88)
—
(48)
7,493
4,866
69
Number of
Options
2,283
4,286
—
(273)
(1)
6,295
4,698
1,355
Weighted
Average
Exercise
Price
$ 16.50
9.83
—
16.50
5.60
11.96
14.12
The following table summarizes information concerning stock options outstanding and exercisable at December 31, 2000 (options in
thousands):
Range of
Exercise Prices
$5.60
$10.89 – $12.53
$13.61 – $15.33
$25.13 – $30.00
Total
Options Outstanding
Weighted Average
Remaining
Contractual Life
Number of Options
Options Exercisable
Weighted Average
Exercise Price
Number of Options
Weighted Average
Exercise Price
1,161
1,289
2,044
1,152
5,646
7.75
7.39
8.17
9.77
8.23
$ 5.60
11.76
14.60
25.34
14.29
293
1,289
1,069
—
2,651
$ 5.60
11.76
13.93
—
11.96
The following is provided to comply with the disclosure requirements of SFAS 123. If compensation cost for the Company’s stock option
programs had been determined using the fair-value method prescribed by SFAS 123, the Company’s results would have been reduced to the
pro forma amounts indicated below (in thousands, except per share amounts):
Year ended December 31
2000
1999
1998
Net earnings
Basic earnings per share
Diluted earnings per share
$ 515,296
3.81
3.75
$ 82,103
0.65
0.64
$ (1,906)
(0.02)
(0.02)
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
34
The weighted average fair value of the options granted was
estimated using the Black-Scholes option pricing model, with the
assumptions presented below. All options granted in 2000 had a
weighted average fair value of $11.64 and a weighted average
exercise price of $25.34. All options granted in 1999 had an exercise
price equal to the market value and a weighted average fair value of
$6.21. For options granted in 1998 with an exercise price equal to the
market value, the weighted average fair value was $3.48 and the
weighted average exercise price was $7.74. For options granted in
1998 with an exercise price greater than the market value, the
weighted average fair value was $3.85 and the weighted average
exercise price was $13.80.
1998
2000
1997
1998
Stock
Stock
Option
Option
Program Program Program Program
1999
1998
Stock
Option
1998
Stock
Option
Expected
dividend yield ...
–
–
–
–
Risk-free
interest rate .....
5.8%
6.0%
4.2%
5.7%
Expected
volatility ..........
58.2%
51.3%
48.3%
48.3%
Expected life
(in years) .........
4.7
4.5
4.5
8.0
11. Leases
Total rental expense under operating leases was $21,431,000,
$21,390,000, and $23,703,000 for the years ended Decem-
ber 31, 2000, 1999, and 1998, respectively.
Future minimum lease payments for operating leases with
initial or remaining noncancelable lease terms in excess of one year
are as follows: 2001 – $15,943,000; 2002 – $13,721,000; 2003 –
$11,895,000; 2004 – $10,766,000; 2005 – $10,391,000; and there-
after – $47,080,000.
12. Financial Instruments
The Company uses financial instruments in the normal course
of its business, including derivative financial instruments, for
purposes other than trading. These financial instruments include
debt and interest rate swap agreements. The notional or contractual
amounts of these commitments and other financial instruments are
discussed below.
Concentration of Credit Risk
Financial instruments with potential credit risk consist prin-
cipally of cash and cash equivalents and accounts receivable. The
Company maintains cash and cash equivalents with various major
financial institutions. Concentrations of credit risk with respect to
receivables are generally limited due to the Company’s large number
of customers and their dispersion across many countries and indus-
tries. At December 31, 2000, the Company had one customer that
represented 13.7% of accounts receivable. At December 31, 1999,
the Company had no significant concentrations of credit risk.
Interest Rate Swap Agreements
In August 1998, the Company entered into six interest rate
interest rate risk related to
swap agreements, maturing in 2003, with a total notional amount of
$300,000,000 to manage
its
multicurrency revolving line of credit. These interest rate swap
agreements required the Company to make payments to the
counterparties at the fixed rate stated in the agreements, and in
return to receive payments from the counterparties at variable rates.
During fiscal 2000, the Company terminated $200,000,000 notional
amount of interest rate swap agreements and recognized a pretax
gain of $8,919,000. At December 31, 2000, the Company had
outstanding one interest rate swap agreement with a notional
amount of $100,000,000. At December 31, 2000 and 1999, the
Company paid a weighted average fixed rate of 5.77% and 5.61%,
respectively, and received a weighted average variable rate of 6.66%
and 6.49%, respectively. The fair value of the interest rate swap
agreements, based on current market rates, approximated a net
receivable of $51,000 and $8,714,000 at December 31, 2000 and
1999, respectively.
Foreign Currency Forward Exchange Contracts
In September 1999, a subsidiary of the Company entered into
foreign currency forward exchange contracts to hedge yen-denomi-
nated commitments from customers in Japan. At December 31, 1999,
the notional amount of outstanding foreign currency forward ex-
change contracts was $6,438,000. In March 2000, the Company
settled all outstanding foreign currency forward exchange contracts
and there are no such contracts as of December 31, 2000.
Cash and Cash Equivalents, Notes Payable, and Long-Term Debt
The carrying amounts reported in the consolidated balance
sheets approximate fair value.
13. Current Vulnerability Due to Certain Concentrations
Customer Concentrations
A material portion of the Company's revenues are derived from
the worldwide communications and computer markets. These mar-
kets have historically experienced wide variations in demand for end
products. If demand for these end products should decrease signifi-
cantly, the producers thereof could reduce their purchases of the
Company's products, which could have a material adverse effect on
the Company's results of operations and financial position.
Sources of Supply
Although most materials incorporated in the Company’s prod-
ucts 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 and wire form primarily under annual contracts with domestic
and foreign suppliers at prices that are subject to periodic adjust-
ment. 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 powder. The Company
believes that in the long-term, there exist sufficient tantalum ore
reserves and a sufficient number of tantalum processors relative to
demand. The tantalum required by the Company has generally been
available in sufficient quantities to meet its requirements. However,
in the short-term, there may be shortages of tantalum powder that
could lead to increases in tantalum prices that the Company may not
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
35
VISHAY INTERTECHNOLOGY, INC.
be able to pass on to its customers. The Company stockpiled tantalum
ore in 2000 and early 2001. Prices for tantalum powder are expected
to increase significantly in 2001.
Palladium is used to produce multi-layer ceramic capacitors.
Palladium is primarily purchased on the spot and forward markets,
depending on market conditions. Palladium is considered a commod-
ity and is subject to price volatility. The price of palladium fluctuated
in the range of approximately $201 to $970 per troy ounce during the
three years ended December 31, 2000, and had increased to $1,090
per troy ounce as of February 27, 2001. Palladium is currently found
primarily in South Africa and Russia. Due to various factors, the
Company believes there may be a short-term shortage of palladium
which may affect both the cost of palladium and the Company’s
ability to expand multi-layer ceramic chip capacitor production to
meet increased demand. 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 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, and various tax abatement
programs. Israeli 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 events were to occur in the
Middle East that materially interfered with the Company’s operations
in Israel.
14. Business Segment and Geographic Area Data
Vishay designs, manufactures, and markets electronic compo-
nents that cover a wide range of products and technologies. The
Company has two reportable segments: Passive Electronic Compo-
nents (Passives) consisting principally of fixed resistors, solid
tantalum surface mount chip capacitors, solid tantalum leaded
capacitors, wet/foil tantalum capacitors, multi-layer ceramic chip
capacitors, film capacitors and inductors, and Active Electronic
Components (Actives) consisting principally of diodes, transistors,
power MOSFETS, power conversion and motor control integrated
circuits.
The Company evaluates performance and allocates resources
based on several factors, of which the primary financial measure is
business segment operating income excluding amortization of intan-
gibles and special charges. The accounting policies of the business
segments are the same as those described in the summary of
significant accounting policies (see Note 1). The operating results of
Actives reflect the acquisition of TEMIC as of March 2, 1998 and
include LPSC from July 1, 1997 through its divestiture in 2000.
Business segment assets are the owned or allocated assets used by
each business.
The corporate component of operating income represents
corporate selling, general, and administrative expenses. Corporate
assets include corporate cash, property, plant, and equipment, and
certain other assets.
During the year 2000, Future Electronics, a North American
distributor, accounted for more than 10% of total net sales. During
the years 1999 and 1998, no individual customer accounted for more
than 10% of net sales. Sales to Future Electronics accounted for 14%
of consolidated sales for the year ended December 31, 2000. At
December 31, 2000, the Company had accounts receivable of
$62,031,000 with Future Electronics.
Business Segment Information (In thousands)
1999
2000
1998
Net sales:
Passives ................
Actives ..................
$ 1,627,860
837,206
$1,008,266
751,825
$1,027,902
544,843
$ 2,465,066
$1,760,091
$1,572,745
$ 547,156
204,640
(43,829)
—
$ 104,655
119,510
(18,061)
—
$ 114,747
51,516
(17,465)
(29,301)
—
—
(13,300)
Operating income:
Passives ................
Actives ..................
Corporate ...............
Unusual items ........
Purchased research
and development
Amortization of
goodwill ............
(11,469)
(12,360)
(12,272)
$ 696,498
$ 193,744
$
93,925
Depreciation expense:
Passives ................
Actives ..................
Corporate ...............
$
$
73,803
52,250
232
75,798
49,826
223
$
74,173
40,210
209
$ 126,285
$ 125,847
$ 114,592
Total assets:
Passives ................
Actives ..................
Corporate ...............
$ 1,931,610
809,360
42,688
$1,429,177
882,296
12,308
$1,693,554
750,875
18,315
$ 2,783,658
$2,323,781
$2,462,744
Capital expenditures:
Passives ................
Actives ..................
Corporate ...............
$ 131,318
95,343
3,120
$
52,903
61,409
5,326
$
87,168
59,969
4,545
$ 229,781
$ 119,638
$ 151,682
The amount of investment in equity method investees in-
cluded in the Actives total assets above was $0, $12,495,000, and
$10,090,000 for 2000, 1999 and 1998, respectively.
VISHAY INTERTECHNOLOGY, INC.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
36
The following geographic area data include net sales based on
revenues generated by subsidiaries located within that geographic
area and property, plant, and equipment based on physical location:
The following table sets forth the computation of basic and
diluted earnings per share (in thousands, except per share amounts):
Year ended December 31
2000
1999
1998
Geographic Area Information (In thousands)
2000
1999
1998
Numerator:
Net income ............
$ 517,864
$
83,237
$
8,212
Net sales:
United States .........
Germany ................
Asia Pacific ............
France ...................
Israel ....................
Other ....................
$ 1,034,985
678,398
279,645
85,686
296,704
89,648
$ 706,049
574,629
273,921
88,975
20,290
96,227
$ 659,845
519,114
185,784
119,992
9,970
78,040
$ 2,465,066
$1,760,091
$1,572,745
Property, plant, and
equipment – net:
United States .....
Germany ............
Israel ................
Asia Pacific ........
France ...............
Other .................
$ 355,291
116,910
317,840
77,337
24,272
81,904
$ 333,594
127,727
268,916
97,060
25,758
77,490
$ 352,007
153,423
283,691
67,051
45,461
95,434
$ 973,554
$ 930,545
$ 997,067
15. Earnings Per Share
Basic earnings per share is computed using the weighted
average number of common shares outstanding during the periods
presented. Diluted earnings per share is computed using the
weighted average number of common shares outstanding, adjusted
to include the potentially dilutive effect of stock options granted
under the Company’s 1995, 1997, and 1998 stock option plans (see
Note 10), stock appreciation rights issued in connection with the
LPSC acquisition (see Note 6), and other potentially dilutive securi-
ties.
Denominator:
Denominator for
basic earnings per
share – weighted
average shares ...
Effect of dilutive
securities:
Employee stock
options ......
Stock
appreciation
rights .........
Other .............
135,295
126,678
126,665
1,831
144
193
809
567
179
—
—
132
Dilutive potential
common shares ..
2,168
1,555
132
Denominator for
diluted earnings
per share –
adjusted weighted
average shares ...
Basic earnings
per share ..................
Diluted earnings
per share ..................
$
$
137,463
128,233
126,797
3.83
$
0.66
$
0.07
3.77
$
0.65
$
0.07
For the years ended December 31, 2000, 1999, and 1998,
respectively, options to purchase 1,114,000 shares of Common Stock
at $25.13 per share, 716,000 shares of Common Stock at $21.94 per
share, and 5,150,000 shares of Common Stock at prices ranging from
$10.89 to $21.94 per share were not included in the computation of
diluted earnings per share because the options’ exercise prices were
greater than the average market price of the common shares.
Notes To Consolidated Financial Statements — December 31, 2000
(Continued)
37
VISHAY INTERTECHNOLOGY, INC.
16. Summary of Quarterly Financial Information (Unaudited)
Quarterly financial information for the years ended December 31, 2000 and 1999 is as follows (in thousands, except per share amounts):
First Quarter
2000
1999
Second Quarter
1999
2000
Third Quarter
2000
1999
Fourth Quarter
2000
1999
Total Year
2000
1999
Net sales ........... $538,894 $423,058
99,890
Gross profit .......
Net earnings ......
818
Basic earnings
(2)
per share ....... $
187,716
74,271
0.57
$
$612,771 $425,323
108,681
20,181
254,096
131,853
$669,784 $443,711 $643,617 $467,999 $2,465,066 $1,760,091
460,386
83,237
1,005,282
517,864
264,094
140,629
299,376
171,111
119,633
25,736
132,182
36,502
(1)
Diluted earnings
(2)
per share ....... $
0.56
$
0.01(1) $
0.96
0.01(1) $
0.97
$
$
0.16
0.16
$
$
1.24
1.22
$
$
0.20 $
1.02
0.20 $
1.01
$
$
0.29 $
3.83 $
0.66
0.28 $
3.77 $
0.65
(1)
The sale of Nicolitch, S.A. and a tax rate change in Germany reduced net earnings by $14,562,000 or $0.11 per share in the first quarter
of 1999.
(2) Adjusted to give retroactive effect to a three-for-two stock split in June 2000 and a five-for-four stock split in June 1999.
17. Subsequent Events
On February 22, 2001, the Company announced its proposal to purchase any and all outstanding shares of common stock of Siliconix
incorporated not already owned by Vishay at a price of $28.82 per share in cash. This amount (approximately $169,000,000) would be financed
through borrowings under the Company’s revolving line of credit. The purchase would be made through a tender offer, subject to customary
conditions, in accordance with the rules of the Securities and Exchange Commission. Vishay also indicated that it might offer to exchange the
Siliconix shares for shares of its common stock. Depending upon whether the exchange would be tax-free to Siliconix stockholders, Vishay would
expect that the value per share of Siliconix in an exchange offer would be somewhat less than the cash price.
The Company also stated that if it holds at least 90% of the outstanding Siliconix shares following the completion of the offer, it may
effect a “short form” merger of Siliconix with a Vishay subsidiary. If such a merger takes place promptly after the offer, the consideration given
to the stockholders in the merger would be the same as the consideration received by tendering stockholders in the offer.
This proposal is currently being evaluated by a special committee of directors of Siliconix appointed by the Siliconix Board of Directors
in March 2001.
Following the announcement of the Company's proposal, several purported class-action complaints were filed against the Company,
Siliconix, and the Siliconix directors, alleging, among other things, that the proposed transaction is unfair and a breach of fiduciary duty, and
seeking, among other things, to enjoin the transaction. The Company has not yet responded to the complaints.
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, 2000 and 1999, and
the related consolidated statements of operations, cash flows, and stockholders’ equity for each of the three years in the period ended
December 31, 2000. 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 auditing standards generally accepted in 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 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, 2000 and 1999, and the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States.
Philadelphia, Pennsylvania
February 5, 2001, except for Note 17 as to which the date is March 8, 2001
VISHAY INTERTECHNOLOGY, INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
38
Introduction and Background
The Company’s sales and net earnings increased significantly
through 1995 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 was reflected in increases in the Company’s sales
and in the decline in selling, general, and administrative expenses
as a percentage of the Company’s sales.
However, beginning with the last quarter of 1995 and through
1998, the Company experienced a decline in demand for its commod-
ity-related products (fixed resistors, multi-layer ceramic chip ca-
pacitors and tantalum capacitors) which accounted for approxi-
mately 50% of the Company’s revenues during that time. Such
decline in demand resulted in a decrease in revenues, earnings and
backlogs of these products.
In order to address the slowdown in demand and price erosion
resulting from an oversupply of tantalum and multi-layer ceramic
chip capacitors, the Company implemented a restructuring program
beginning in 1996 that included the downsizing and closing of
manufacturing facilities in North America and Europe. In connection
with the restructuring, the Company incurred $38,030,000 of pretax
charges for the year ended December 31, 1996 relating to employee
termination and facility closure costs. In 1997, the Company in-
curred $12,605,000 of restructuring expenses relating to employee
termination and facility closure costs in Europe. In 1998, the
Company incurred $6,244,000 of restructuring expenses.
In the late 1990s, the Company began to enter into the active
components business. In July 1997, the Company purchased a 65%
interest in LPSC, a Taiwan-based company that is a major supplier of
discrete active electronic components in Asia. In July 2000, the
Company sold its interest in LPSC to the Lite-On Group, the owner of
the remaining 35% interest in LPSC, for consideration consisting of
cash and the assignment or transfer to Vishay of the Lite-On Group’s
rights under stock appreciation rights. In 1998, the Company
acquired the Semiconductor Business Group of TEMIC, which in-
cluded Telefunken and 80.4% of Siliconix, producers of transistors,
diodes, optoelectronics, and power and analog switching integrated
circuits. In February 2001, the Company communicated a proposal to
the Board of Directors of Siliconix to purchase any and all outstand-
ing shares of Siliconix not already owned by Vishay. This proposal is
currently being evaluated by a special committee of directors of
Siliconix appointed in March 2001.
From the third quarter of 1999 through the third quarter of
2000, the Company experienced increased demand for its products,
including both passive and active electronic components, as a result
of growth in the wireless telecommunications market, particularly
cell phones, and the increased use of embedded computing devices
in a wide range of consumer and commercial products. The Company
expanded capacity in all of its major product lines in order to satisfy
the increased demand, and, in some cases, was able to increase
pricing for its products because of tight supply, reversing the price
erosion experienced in prior years. However, as a result of a recent
slowing of growth in the personal computer and cell phone product
markets, the Company has recently experienced softness in product
demand, resulting in order cancellations and deferrals. This decrease
in demand could cause a significant drop in average sales prices,
which could, in turn, cause a reduction in the Company’s gross
margins and operating profits.
The Company’s strategy contemplates 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, the Czech Republic, Taiwan and the People’s
Republic of China in order to benefit from lower labor costs and, in
the case of Israel, to take advantage of various government incen-
tives, including government grants and tax incentives. The Company
intends to continue to explore and implement opportunities for cost
efficiencies in its manufacturing operations.
The Company realizes approximately 56% of its revenues from
customers 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 fluctua-
tions 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 minimize the time for settling intercompany transac-
tions.
In connection with its day-to-day operations, the Company
generally does not purchase foreign currency exchange contracts or
other derivative instruments to hedge foreign currency exposures. In
September 1999, a subsidiary of the Company entered into foreign
currency forward exchange contracts to manage exchange rate
exposure on certain foreign currency denominated transactions. As
of December 31, 2000, the Company and its subsidiaries did not have
any outstanding foreign currency forward exchange contracts.
form of grants designed to
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 rate 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 are normally 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
in
Israel. However, the Israeli government has scaled back or discon-
tinued some of its incentive programs over the past several
years. Accordingly, there can be no assurance that in the future the
Israeli government will continue to offer new incentive programs
applicable to the Company or that, if it does, such programs will
provide the same level of benefits the Company has historically
received or that 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. However, because a majority of the
Company’s projects in Israel already benefit from government incen-
tive programs, the Company does not anticipate that any cutbacks in
the incentive programs would have an adverse impact on its earnings
and operations for at least several years.
increase employment
Israeli government grants, recorded as a reduction of costs of
products sold, were $15,721,000 for the year ended December 31,
2000, as compared to $14,256,000 for the prior year. If the Israeli
government continues its grant and incentive programs, future
benefits offered to the Company by the Israeli government will likely
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
39
VISHAY INTERTECHNOLOGY, INC.
depend on the Company’s continuing to increase capital investment
and the number of Company employees in Israel.
Results of Operations
Income statement captions as a percentage of sales and the
effective tax rates were as follows:
Year ended December 31
2000
1999
1998
Costs of products sold ............
Gross profit ...........................
Selling, general and
administrative expenses ......
Operating income ...................
Earnings before income taxes
and minority interest ..........
Effective tax rate ...................
Net earnings ..........................
59.2%
40.8
73.8%
26.2
75.6%
24.4
12.1
28.3
28.0
21.5
21.0
14.5
11.0
7.7
27.4
4.7
14.9
6.0
2.7
71.8
0.5
Year ended December 31, 2000 compared to
Year ended December 31, 1999
Net Sales
Net sales for the year ended December 31, 2000 increased
$704,975,000 or 40.1% from the prior year. Both the passive and
active components segments contributed to these increases. The
strengthening of the U.S. dollar against foreign currencies for the
year ended December 31, 2000, in comparison to the prior year,
resulted in decreases in reported sales of $105,615,000. The passive
components business net sales were $1,627,861,000 for the year
ended December 31, 2000 as compared to $1,008,266,000 for the
prior-year period, a 61.5% increase. The active components business
net sales were $837,205,000 for the year ended December 31, 2000
as compared to $751,825,000 for the prior-year period, an 11.4%
increase. Strong demand, particularly in the wireless communica-
tions market, for the Company’s products and increased average
selling prices contributed to the sales growth. Although backlog at
December 31, 2000 remains strong, the Company is experiencing a
slowdown in bookings in 2001, as the cell phone and computer
markets have experienced a slowing of growth.
Costs of Products Sold
Costs of products sold for the year ended December 31, 2000
were 59.2% of net sales, as compared to 73.8% for the prior year.
Gross profit, as a percentage of net sales, for the year ended
December 31, 2000 was 40.8% as compared to 26.2% for the
comparable prior-year period. Both the passive and active compo-
nents segments contributed to the improved gross margins.
The passive components business gross profit margins were
41.7% for the year ended December 31, 2000 as compared to 22.4%
for the prior-year period. Price and volume increases in the resistor,
tantalum capacitor, and multi-layer ceramic chip capacitor product
lines were primarily responsible for this improvement in gross
margins.
The active components business gross profit margins were
39.0% for the year ended December 31, 2000 as compared to 31.4%
for the prior year. Continued cost reductions, increased manufactur-
ing efficiencies and an improved product mix contributed to the
improved gross margins. The increase reflects improvements at the
Siliconix operation, where gross profit margins increased to 46.0%
of net sales in 2000 compared to 41.0% in 1999 primarily as a result
of economies of scale in manufacturing operations, productivity
improvements, and further advances in technologies.
Israeli government grants, recorded as a reduction of costs of
products sold, were $15,721,000 for the year ended Decem-
ber 31, 2000, as compared to $14,256,000 for the prior year. 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 Company employ-
ees in Israel. Deferred income at December 31, 2000 relating to
Israeli government grants was $55,162,000 as compared to
$50,462,000 at December 31, 1999.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses for the year
ended December 31, 2000 were 12.1% of net sales, as compared to
14.5% for the prior year. This reduction was a result of higher net
sales in 2000 as compared to 1999 and reflects company-wide cost
reduction initiatives, particularly the reduction of headcount in high
labor cost countries.
Interest Expense
Interest costs decreased by $28,119,000 for the year ended
December 31, 2000 from the prior year. This decrease was a result of
lower bank borrowings during the year 2000 as compared to the prior
year. The Company received net proceeds of $395,449,000 from a
Common Stock offering in May 2000, which were used to pay down
long-term debt.
Other Income
Other income was $18,904,000 for the year ended Decem-
ber 31, 2000 as compared to an expense of $5,737,000 in the prior
year. The 2000 amount includes higher interest income, a gain on
sale of subsidiaries, and a gain from termination of interest rate swap
agreements. Proceeds received from the May 2000 Common Stock
offering and cash flows from operations were used to pay down debt
outstanding under the Company’s long-term revolving credit agree-
ment. In connection with debt repayments, the Company terminated
$200,000,000 notional amount of interest rate swap agreements and
recognized pretax gains of $8,919,000. These amounts were partially
offset by foreign exchange losses of $7,305,000.
Minority Interest
Minority interest increased by $9,641,000 for the year ended
December 31, 2000 as compared to the prior year primarily due to the
increase in net earnings of Siliconix, of which Vishay owns 80.4%.
Income Taxes
The effective tax rate for the year ended December 31, 2000
was 21.5% as compared to 27.4% for the prior year. The higher tax
rate for the year ended December 31, 1999 reflects the non-tax-
deductibility of the loss on the sale of Nicolitch, S.A. Tax expense on
the sale of Nicolitch, S.A. was $1,416,000. Also, a tax rate change
in Germany resulted in a decrease in German deferred tax assets,
which increased tax expense by $1,939,000. Exclusive of the effect
of the sale of Nicolitch, S.A. and the tax rate change in Germany, the
effective tax rate on earnings before minority interest for the year
ended December 31, 1999 would have been 23.2%. The continuing
effect of low tax rates in Israel, as compared to the statutory rate in
VISHAY INTERTECHNOLOGY, INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
40
the United States, resulted in increases in net earnings of
$89,745,000 and $12,469,000
for the years ended Decem-
ber 31, 2000 and 1999, respectively. The more favorable Israeli tax
rates are applied to specific approved projects and are normally
available for a period of ten or fifteen years.
Israeli government will likely depend on the Company’s continuing
to increase capital investment and the number of Company employ-
ees in Israel. Deferred income at December 31, 1999 relating to
Israeli government grants was $50,462,000 as compared to
$59,264,000 at December 31, 1998.
Year ended December 31, 1999 compared to
Year ended December 31, 1998
Net Sales
Net sales for the year ended December 31, 1999 increased
$187,346,000 or 11.9% from the prior year. The increase in net sales
related primarily to the results of TEMIC, which was acquired
March 2, 1998. Net sales of TEMIC for the year ended Decem-
ber 31, 1999 were $673,300,000 as compared to $474,188,000
included in the Company’s reported sales for the ten months ended
December 31, 1998. Exclusive of TEMIC, net sales would have de-
creased by $11,776,000 or 1.0%. The strengthening of the U.S. dollar
against foreign currencies for the year ended December 31, 1999, in
comparison to the prior year, resulted in decreases in reported sales
of $15,882,000. The passive components business net sales were
$1,008,266,000 for the year ended December 31, 1999 as compared
to $1,027,902,000 for the prior year period. The active components
business net sales were $751,825,000 for the year ended December
31, 1999 as compared to $544,843,000 for the prior-year period. The
1999 sales of the active business reflected increased demand for
product, particularly in telecommunications and computer applica-
tions, and reduced price erosion on its products.
Costs of Products Sold
Costs of products sold for the year ended December 31, 1999
were 73.8% of net sales, as compared to 75.6% for the prior year.
Gross profit, as a percentage of net sales, for the year ended
December 31, 1999 increased from the comparable prior-year period
mainly due to the results of TEMIC. TEMIC reported gross profit
margins of 33.3% for the year ended December 31, 1999 as compared
to 30.1% for the ten months ended December 31, 1998, mainly due
to higher business volume and manufacturing efficiencies gained
from the full utilization of existing manufacturing capacity.
The active components business gross margins were 31.4% for
the year ended December 31, 1999 as compared to 27.9% for the
prior-year period. The increase was due to the Siliconix operation,
where gross margins increased substantially as a result of increased
product demand, stronger capacity utilization, an improved product
mix and increased fab efficiencies.
The passive components business gross profit margins were
22.4% for the year ended December 31, 1999 as compared to 22.5%
for the prior-year period. Profitability for the passive components
business was negatively affected by price erosion, which began in the
second quarter of 1998. However, beginning in the third quarter of
1999, most of the Company’s product lines saw an increase in demand
and the average selling prices stopped declining, with prices actually
increasing in some instances.
Israeli government grants, recorded as a reduction of costs of
products sold, were $14,256,000 for the year ended Decem-
ber 31, 1999, as compared to $13,116,000 for the prior year. Future
grants and other incentive programs offered to the Company by the
Selling, General and Administrative Expenses
Selling, general, and administrative expenses for the year
ended December 31, 1999 were 14.5% of net sales, as compared to
14.9% for the prior year. The decrease in selling, general and
administrative expenses was primarily due to the cost reduction
initiatives of TEMIC, for which selling, general and administrative
expenses were 16.1% for the year ended December 31, 1999 as
compared to 19.6% for the ten months ended December 31, 1998.
Interest Expense
Interest costs increased by $4,258,000 for the year ended
December 31, 1999 from the prior year. Bank borrowings related to
the TEMIC acquisition were outstanding for twelve months during
1999 compared to ten months during 1998. Also during 1999,
interest rates increased as compared to the prior year.
Other Income
Other income decreased by $3,496,000 for the year ended
December 31, 1999 as compared to the prior year. Included in the
results for the year ended December 31, 1999 was a noncash loss of
$10,073,000 in connection with the sale of Nicolitch, S.A., a
subsidiary of the Company. Included in the results for the year ended
December 31, 1998 was a loss of $6,269,000 related to a forward
exchange contract entered into to set the purchase price in connec-
tion with the TEMIC acquisition.
Minority Interest
Minority interest increased by $10,724,000 for the year ended
December 31, 1999 as compared to the prior year primarily due to the
increase in net earnings of Siliconix, of which Vishay owns 80.4%.
Income Taxes
The effective tax rate for the year ended December 31, 1999
was 27.4% as compared to 71.8% for the prior year. The tax rate for
the year ended December 31, 1999 reflects the non-tax-deductibility
of the loss on the sale of Nicolitch, S.A. Tax expense on the sale of
Nicolitch, S.A. was $1,416,000. Also, a tax rate change in Germany
resulted in a decrease in German deferred tax assets, which increased
tax expense by $1,939,000. Exclusive of the effect of the sale of
Nicolitch, S.A. and the tax rate change in Germany, the effective tax
rate on earnings before minority interest for the year ended Decem-
ber 31, 1999 would have been 23.2%. The higher tax rate for the year
ended December 31, 1998 was primarily due to the non-tax-deduct-
ibility of the in-process research and development expense in 1998
and a $10,000,000 increase in a valuation allowance for a deferred
tax asset for net operating loss carryforwards in Germany. Exclusive
of the effect of special charges, the tax rate on earnings before
minority interest for the year ended December 31, 1998 would have
been 27.8%. The continuing effect of low tax rates in Israel, as
compared to the statutory rate in the United States, resulted in
increases in net earnings of $12,469,000 and $15,166,000 for the
years ended December 31, 1999 and 1998, respectively. The more
favorable Israeli tax rates are applied to specific approved projects
and are normally available for a period of ten or fifteen years.
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
41
VISHAY INTERTECHNOLOGY, INC.
Financial Condition and Liquidity
Inflation
Cash flows from operations were $542,319,000 for the year
ended December 31, 2000 compared to $239,547,000 for the prior
year. The increase in cash flows from operations is primarily attrib-
utable to an increase in net earnings for the year ended Decem-
ber 31, 2000 as compared to the year ended December 31, 1999. Net
purchases of property and equipment for the year ended Decem-
ber 31, 2000 were $229,781,000 compared to $119,638,000 in the
prior year, reflecting the Company’s efforts toward increasing capac-
ity. The Company paid down $506,687,000 on its revolving credit
lines during the year 2000. These payments were partially funded by
$395,449,000 of proceeds from the May 2000 Common Stock offering
and $39,873,000 of proceeds from the exercise of stock options. On
July 12, 2000, the Company completed the sale of its 65% interest
in LPSC to the Lite-On Group. The net cash proceeds of $33,162,000
were used to further pay down the Company’s long-term debt. See
Notes 2 and 3 to the Consolidated Financial Statements for discus-
sion of restructuring costs paid during 1999.
The Company’s financial condition at December 31, 2000 is
strong, with a current ratio of 3.53 to 1. The Company’s ratio of
long-term debt, less current portion, to stockholders’ equity was .08
to 1 at December 31, 2000 and .65 to 1 at December 31, 1999.
On March 2, 1998, the Company and certain of its subsidiaries
entered into a $1.1 billion multicurrency revolving credit agreement
with a group of banks that included an $825 million long-term
revolving credit and swing line facility and a $275 million short-term
revolving credit facility. On June 1, 1999 and August 31, 2000, the
Company amended the credit facilities. The amended agreement now
provides for a $660,000,000 long-term revolving credit and swing
line facility maturing on June 1, 2005, subject to Vishay’s right to
request year-to-year renewals. Borrowings under the facility bear
interest at variable rates based, at the option of Vishay, on the prime
rate or a eurocurrency rate and in the case of any swing line advance,
the quoted rate. The borrowings under the loan agreement are
secured by pledges of stock in certain significant subsidiaries and
indirect subsidiaries of Vishay and guaranties by certain significant
subsidiaries. The Company is required to pay facility fees on the long-
term facility. The credit facility restricts the Company from paying
cash dividends, and requires the Company to comply with certain
financial covenants. See Note 5 to the Consolidated Financial
Statements for additional information.
Management believes that available sources of credit, to-
gether 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.
Euro Conversion
On January 1, 1999, 11 of the 15 member countries of the
European Union adopted the euro as their common legal currency and
established fixed conversion rates between their existing sovereign
currencies and the euro. The Company is currently evaluating issues
raised by the introduction and initial implementation of the euro on
January 1, 2002. The Company does not expect costs of system
modifications to be material, nor does it expect the introduction and
use of the euro to materially and adversely affect its financial
condition or results of operations. The Company will continue to
evaluate the impact of the euro introduction.
Normally, inflation does not have 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
extent permitted by competition, can be adjusted to reflect cost
increases caused by inflation.
Market Risk Disclosure
The Company’s cash flows and earnings are subject to fluctua-
tions resulting from changes in foreign currency exchange rates and
interest rates. The Company manages its exposure to these market
risks through internally established policies and procedures and,
when deemed appropriate, through the use of derivative financial
instruments. Company policy does not allow speculation in deriva-
tive instruments for profit or execution of derivative instrument
contracts for which there are no underlying exposures. The Company
does not use financial instruments for trading purposes and is not a
party to any leveraged derivatives. The Company monitors its under-
lying market risk exposures on an ongoing basis and believes that it
can modify or adapt its hedging strategies as needed.
The Company is exposed to changes in U.S. dollar LIBOR
interest rates on its floating rate revolving credit facility. At
December 31, 2000, the outstanding balance under this facility was
$140,000,000. On a selective basis, the Company from time to time
enters into interest rate swap or cap agreements to reduce the
potential negative impact increases in interest rates could have on
its outstanding variable rate debt. The impact of interest rate
instruments on the Company’s results of operations in each of the
three years ended December 31, 2000 was not significant. See Notes
5 and 12 to Consolidated Financial Statements for components of the
Company’s long-term debt and interest rate swap arrangements.
In August 1998, the Company entered into six interest rate
swap agreements with a total notional amount of $300,000,000 to
manage interest rate risk related to its multicurrency revolving line
of credit. As of December 31, 2000, five of these six agreements had
been terminated. The remaining agreement, which expires in 2003,
has a notional amount of $100,000,000 and requires the Company to
make payments to the counterparty at variable rates based on
USD-LIBOR-BBA rates. At December 2000 and 1999, the Company
paid a weighted average fixed rate of 7.16% and 5.61%, respectively,
and received a weighted average variable rate of 6.53% and 6.49%,
respectively. The fair value of the interest rate swap agreements,
based on current market rates, approximated a net receivable of
$51,000 and $8,714,000 at December 31, 2000 and 1999, respec-
tively.
Foreign Exchange Risk
The Company is exposed to foreign currency exchange rate
risks. The Company’s significant foreign subsidiaries are located in
Germany, France, Israel and the Far East. The Company, in most
locations, has introduced a “netting” policy where subsidiaries pay
all intercompany balances within thirty days. In September 1999, a
subsidiary of the Company entered into foreign currency forward
exchange contracts to manage the effect of exchange rate changes
on certain foreign currency denominated transactions. As of Decem-
ber 31, 2000, the Company did not have any outstanding foreign
currency forward exchange contracts.
VISHAY INTERTECHNOLOGY, INC.
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
42
In the normal course of business, the financial position of the
Company is routinely subjected to a variety of risks, including market
risks associated with interest rate movements, currency rate move-
ments on non-U.S. dollar denominated assets and liabilities and
collectibility of accounts receivable. The Company does not antici-
pate material losses in these areas.
Safe Harbor Statement
From time to time, information provided by the Company,
including but not limited to statements in this report, or other
statements made by or on behalf of the Company, may contain
“forward-looking” information within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve a
number of risks, uncertainties and contingencies, many of which are
beyond the Company’s control, which may cause actual results,
performance or achievements to differ materially from those
anticipated. Set forth below are important factors that could cause
the Company’s results, performance or achievements to differ mate-
rially from those in any forward-looking statements made by or on
behalf of the Company.
Changes in Product Demand, Competition, Backlog
• The Company offers a broad variety of products and services to
its customers. Changes in demand for, or in the mix of, products
and services comprising revenues could cause actual operating
results to vary from those expected. Due to a recent slowing of
growth in the personal computer and cell phone markets, the
Company and others in the electronic and semi-conductor
component industry have recently experienced softness in
product demand, resulting in order cancellations and deferrals.
This slowdown may continue and may become more pro-
nounced. Such a slowdown in demand, as well as recessionary
trends in the global economy in general or in specific countries
or regions where the Company sells the bulk of its products,
such as the U.S., Germany, France or the Pacific Rim, could
adversely impact the Company’s results of operations.
• The Company operates in a highly competitive environment,
which includes significant competitive pricing pressures and
intense competition for entry into new markets. The electronics
components industry has become increasingly concentrated
and globalized in recent years, and the Company’s major
competitors, some of which are larger than the Company, have
significant financial resources and technological capabilities.
• Many of the orders in the Company’s backlog may be canceled
by its customers without penalty. Customers may on occasion
double and triple order components from multiple sources to
ensure timely delivery when backlog is particularly long. The
Company’s results of operations may be adversely impacted if
customers were to cancel a material portion of such orders and
this produced a significant decrease in demand for the
Company’s products.
Product Development, Business Expansion
• The Company’s future operating results are dependent, in part,
on its ability to develop, produce and market new and innova-
tive products, to convert existing products to surface mount
devices and to customize certain products to meet customer
requirements. There are numerous risks inherent in this com-
plex process, including the risks that the Company will be
unable to anticipate the direction of technological change or
that the Company will be unable to timely develop and bring to
market new products and applications to meet customers’
changing needs.
• The Company’s historic growth in revenues and net earnings has
resulted in large part from its strategy to expand through
acquisitions. However, there is no assurance that the Company
will find or consummate transactions with suitable acquisition
candidates in the future. From time to time, when the Com-
pany is in the process of pursuing a strategic acquisition, the
Company or the acquisition target may feel compelled for
securities and other legal reasons to announce the potential
acquisition or the Company’s desire to enter into a certain
market prior to entering into formal agreements. As a result,
there can be no assurance that the Company will consummate
any such acquisition.
• The Company was substantially debt free at the end of 2000. If
the Company were to undertake a substantial acquisition for
cash, the acquisition would likely need to be financed in part
through bank borrowings or the issuance of public or private
debt. This would decrease the Company’s ratio of earnings to
fixed charges and adversely affect other leverage criteria. The
Company cannot ensure that the necessary acquisition financ-
ing would be available to the Company when required on
acceptable terms.
• The Company may have difficulty expanding its manufacturing
of product lines to satisfy future increases in demand for its
products. Factors that could limit such expansion include
delays in procurement of manufacturing equipment, shortages
of skilled personnel and capacity constraints at the Company’s
facilities. If the Company is unable to meet its customers’
requirements and its competitors sufficiently expand produc-
tion, the Company could lose customers and/or market share.
• Any drop in demand or increase in supply of the Company’s
products due to the expansion of production capacity by the
Company’s competitors could cause a dramatic drop in average
sales prices causing a drop in gross margins.
Foreign Operations and Sales
• Approximately 56% of the Company’s revenues are derived from
sales to customers outside the United States. As a result,
currency exchange rate fluctuations, regional inflation,
changes in monetary policy and tariffs, potential changes in
laws and regulations affecting the Company’s business in
foreign jurisdictions, international trade restrictions or prohi-
bitions, intergovernmental disputes, increased labor costs and
reduction or cancellation of government grants, tax benefits or
other incentives could impact the Company’s results of opera-
tions.
• Specifically, 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
U.S., have had the effect of increasing the Company’s net
earnings. In addition, the Company takes advantage of certain
incentive programs in Israel in the form of grants designed to
increase employment in Israel. Any significant increase in the
Israeli tax rates or reduction or elimination of any of the Israeli
grant programs could have an adverse impact on the Company’s
results of operations.
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
43
VISHAY INTERTECHNOLOGY, INC.
Restructuring and Cost Reduction Activities
• The Company’s strategy is aimed at achieving significant
production cost savings through the transfer and expansion of
manufacturing operations to lower cost regions such as Israel,
Mexico, Portugal, the Czech Republic, Taiwan and the People’s
Republic of China. In this process, the Company may experience
underutilization of certain plants and factories in high labor
cost regions and capacity constraints in plants and factories
located in low labor cost regions, resulting initially in produc-
tion inefficiencies and higher costs. Such costs include those
associated with work force reductions and plant closings in the
higher labor cost regions, as described in "Introduction and
Background," and start-up expenses, manufacturing and con-
struction delays, and increased depreciation costs in connec-
tion with the start of production in new plants and expansions
in lower labor cost regions. Moreover, capacity constraints
may limit the Company’s ability to continue to meet demand for
any of the Company’s products. For example, during 1998,
restructuring costs were particularly high as a result of the
Company’s accelerated effort to streamline operations in re-
sponse to the continued weakness in the international elec-
tronic components market at the time.
• The Company has in the past and may in the future respond to
changing economic conditions by restructuring its operations.
Such restructuring, particularly in Europe, may result in labor
unrest or strikes, which could have an adverse effect on the
Company.
• The Company’s strategy also focuses on the reduction of selling,
general and administrative expenses through the integration or
elimination of redundant sales offices and administrative
functions at acquired companies. The Company’s inability to
achieve these goals could have an adverse effect on the
Company’s results of operations.
Raw Materials
• The Company’s results of operations may be adversely impacted by:
1. difficulties in obtaining raw materials, supplies, power,
natural resources and any other items needed for the produc-
tion of the Company’s products;
2. the effects of quality deviations in raw materials, particu-
larly tantalum powder, palladium and ceramic dielectric
materials; and
3. the effects of significant price increases for tantalum or
palladium, or an inability to obtain adequate supplies of
tantalum or palladium from the limited number of suppliers.
Prices for tantalum powder are expected to increase signifi-
cantly in the near future.
The Class B Common Stock
• The holders of common stock are entitled to one vote for each
share held, while the holders of Class B common stock are
entitled to 10 votes for each share held. Currently, the holders
of Class B common stock hold 57% of the voting power of the
Company. As a result, the holders of Class B common stock are
able to cause the election of their nominees as directors of the
Company. The holders of Class B common stock may also be able
to approve other actions as stockholders without obtaining the
votes of other stockholders of the Company.
• The effective control of the Company by holders of Class B
common stock may make the Company less attractive as a target
for a takeover proposal. It may also render more difficult or
discourage a merger proposal or proxy contest for the removal
of the incumbent directors, even if such actions were favored
by all stockholders of the Company other than the holders of the
Class B common stock. Accordingly, this may deprive the
holders of common stock of an opportunity they might other-
wise have to sell their shares at a premium over the prevailing
market price in connection with a merger or acquisition of the
Company with or by another company.
Miscellaneous Factors
• The Company’s results may also be affected by a variety of other
factors, including:
1. possible environmental liability and remediation costs;
2. legal proceedings and investigations;
3. possible challenges to the Company’s intellectual property
rights;
4. increases in the Company’s debt levels or its cost of borrowings;
5. changes in generally accepted accounting policies and practices;
6. disruptions to the Company’s manufacturing operations that
may result from casualty losses, military hostilities particularly
in the Middle East, or acts of God; and
7. changes in executive personnel.
Common Stock Market Prices
Calendar 2000
Low
High
Calendar 1999
Low
High
First Quarter ..............
Second Quarter ..........
Third Quarter .............
Fourth Quarter ...........
$ 40.88
$ 62.63
$ 44.75
$ 31.75
$ 18.58
$ 35.00
$ 26.00
$ 13.88
$ 8.27
$ 14.04
$ 17.50
$ 21.33
$ 5.90
$ 7.80
$ 12.04
$ 14.17
The Company’s Common Stock is listed on the New York Stock
Exchange under the symbol VSH. The table shown above 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 2000 and 1999 calendar 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 agreement. See Note 5 to the Consoli-
dated Financial Statements. Holders of record of the Company’s
Common Stock totaled approximately 2,067 at March 27, 2001.
At March 27, 2001, the Company had outstanding 15,518,546
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 except in certain very limited
instances 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 of such Class B Stock is owned
by Dr. Felix Zandman, Mrs. Luella B. Slaner and trusts for the benefit
of Mrs. Slaner’s grandchildren, either directly or beneficially. Dr.
Felix Zandman is an executive officer and director of the Company.
Mrs. Luella B. Slaner is a director of the Company.
VISHAY INTERTECHNOLOGY, INC.
44
Financial Summary
Summary of Operations (in thousands, except per share amounts)
2000
1999
1998
1997
Net sales .........................................................................
$ 2,465,066
$ 1,760,091
$ 1,572,745
$ 1,125,219
As of and for the Year ended December 31
1,299,705
1,189,107
Costs of products sold ......................................................
Gross profit ..................................................................
Selling, general, and administrative expenses ....................
Amortization of goodwill ..................................................
Unusual items ..................................................................
Operating income .............................................................
Other income (expense):
Interest expense ..........................................................
Other ..........................................................................
Total other income (expense) ................................
Earnings before income taxes, minority interest, and
cumulative effect of accounting change .........................
Income taxes ...................................................................
Minority interest ..............................................................
Earnings before cumulative effect of accounting change .....
Cumulative effect of accounting change ............................
1,459,784
1,005,282
297,315
11,469
—
696,498
(25,177)
18,904
(6,273)
690,225
148,186
24,175
517,864
—
Net earnings ................................................................
$ 517,864
Earnings per share:
Basic ...........................................................................
Diluted ........................................................................
$
$
3.83
3.77
Shares used in computing earnings per share:
Basic ...........................................................................
Diluted ........................................................................
135,295
137,463
$
$
$
Financial Data (in thousands, except ratios)
460,386
254,282
12,360
—
193,744
(53,296)
(5,737)
(59,033)
134,711
36,940
14,534
83,237
—
83,237
0.66
0.65
126,678
128,233
383,638
234,840
12,272
42,601
93,925
(49,038)
(2,241)
(51,279)
42,646
30,624
3,810
8,212
—
8,212
0.07
0.07
$
$
$
858,020
267,199
136,876
7,218
14,503
108,602
(18,819)
(222)
(19,041)
89,561
34,167
2,092
53,302
—
53,302
0.42
0.42
$
$
$
126,665
126,797
126,627
126,904
Cash and cash equivalents ................................................
$
337,213
$
105,193
$
113,729
$
55,263
Working capital ................................................................
1,057,200
Current ratio ....................................................................
Property and equipment — net .........................................
Capital expenditures .........................................................
Depreciation and amortization ..........................................
Total assets .....................................................................
Long-term debt ................................................................
Stockholders’ equity .........................................................
3.53
973,554
229,781
140,840
2,783,658
140,467
1,833,855
604,150
2.87
930,545
119,638
139,676
2,323,781
656,943
1,013,592
650,483
3.13
997,067
151,682
127,947
2,462,744
814,838
1,002,519
455,134
3.38
709,142
78,074
81,874
1,719,648
347,463
959,648
Note: This table should be read in conjunction with the related consolidated financial statements and accompanying notes and
management’s discussion and analysis of financial condition and results of operations. The information set forth in this table includes the results
of TEMIC from March 1, 1998, the results of Lite-On Power Semiconductor Corporation from July 1, 1997 to July 12, 2000, the results of Vitramon
from July 1, 1994, the results of Roederstein from January 1, 1993 and the results of the businesses acquired from Sprague Technologies, Inc.
from January 1, 1992. Earnings per share amounts and weighted average shares outstanding have been retroactively restated for stock dividends
and stock splits. Basic and diluted earnings per share for 1993 includes $0.01 for the cumulative effect of an accounting change for income taxes.
VISHAY INTERTECHNOLOGY, INC.
45
1996
1995
1994
1993
1992
1991
1990
$ 1,097,979
$ 1,224,416
$
987,837
$ 856,272
$ 664,226
$ 442,283
$ 445,596
As of and for the Year ended December 31
825,866
272,113
141,765
6,494
38,030
85,824
(17,408)
2,430
(14,978)
70,846
17,741
489
52,616
—
52,616
0.41
0.41
126,632
126,717
$
$
$
902,518
321,898
158,821
6,461
4,200
152,416
(29,433)
272
(29,161)
123,255
30,307
281
92,667
—
92,667
0.78
0.78
117,857
117,923
$
$
$
748,135
239,702
137,124
4,609
—
97,969
(24,769)
916
(23,853)
74,116
15,169
—
58,947
—
58,947
0.55
0.55
$
$
$
663,239
193,033
118,906
3,294
(562)
71,395
(20,624)
123
(20,501)
50,894
8,246
—
42,648
1,427
44,075
0.43
0.43
$
$
$
106,571
106,571
101,593
101,593
508,018
156,208
101,327
2,380
—
52,501
(19,110)
4,533
(14,577)
37,924
7,511
—
30,413
—
$
30,413
$
$
0.37
0.36
82,652
92,687
318,166
124,117
75,973
1,695
3,700
42,749
(15,207)
(289)
(15,496)
27,253
6,363
—
20,890
—
20,890
0.26
0.26
79,686
79,686
$
$
$
$
20,945
$
19,584
$
26,876
434,199
3.27
710,662
136,276
77,247
1,558,515
229,885
945,230
411,286
2.80
669,228
165,699
69,547
1,543,331
228,610
907,853
328,322
2.41
543,402
91,571
57,742
1,345,070
402,337
565,088
$
10,949
205,806
$
15,994
145,327
$
14,438
128,733
2.09
422,668
79,377
48,578
950,670
266,999
376,503
2.02
271,619
49,801
36,062
661,643
139,540
346,625
2.65
171,951
26,660
27,056
448,771
127,632
201,366
312,925
132,671
77,740
1,552
2,441
50,938
(19,426)
2,344
(17,082)
33,856
10,655
—
23,201
—
23,201
0.32
0.31
73,223
85,961
$
$
$
$
16,306
120,384
2.42
166,346
28,999
26,157
440,656
140,212
177,839
VISHAY INTERTECHNOLOGY, INC.
Corporate Information
46
Board of Directors
Corporate Officers
Shareholders’ Information
Dr. Felix Zandman
Chairman of the Board
Chief Executive Officer
Avi D. Eden
Vice Chairman of the Board
Executive Vice President
Dr. Gerald Paul
President
Chief Operating Officer
Richard N. Grubb
Executive Vice President,
Treasurer, Chief Financial Officer
Robert A. Freece
Senior Vice President
William J. Spires
Vice President, Secretary
Annual Meeting
May 24, 2001 at 10:30 a.m.
Four Seasons Hotel
South Ballroom
Lobby Level
One Logan Square
Philadelphia, PA 19103
Dr. Felix Zandman
Chairman of the Board
Chief Executive Officer
Vishay Intertechnology, Inc.
Avi D. Eden
Vice Chairman of the Board
Executive Vice President
Vishay Intertechnology, Inc.
Robert A. Freece
Senior Vice President
Vishay Intertechnology, Inc.
Richard N. Grubb
Executive Vice President,
Treasurer, Chief Financial Officer
Vishay Intertechnology, Inc.
Eliyahu Hurvitz
President and Chief Executive Officer
Teva Pharmaceutical Industries, Ltd.
Dr. Gerald Paul
President
Chief Operating Officer
Vishay Intertechnology, Inc.
Dr. Edward B. Shils
George W. Taylor Professor Emeritus of
Entrepreneurial Studies
The Wharton School
University of Pennsylvania
Luella B. Slaner
Investor
Mark I. Solomon
Founder and Chairman
CMS Companies
Jean-Claude Tiné
Investor and
Former Chairman of the Board
Sfernice, S.A.
Honorary Chairman of the Board
Alfred P. Slaner
(Deceased March 14, 1996)
Independent Auditors
Ernst & Young LLP
Philadelphia, PA
Transfer Agent and Registrar
American Stock Transfer & Trust Company
40 Wall St., 46th Floor
New York, NY 10055
Phone: 800-937-5449
Stock Exchange Listings
New York Stock Exchange
Symbol: VSH
Midwest Stock Exchange
Chicago Board of Options Exchange
Investor Relations Contact
Robert A. Freece
Senior Vice President
Vishay Intertechnology, Inc.
Phone: 610-644-1300
Quarterly Report Mailings
Shareholders owning Vishay stock indirectly
(through a bank, broker, or nominee who is
a registered holder) can receive our reports
directly and promptly from the Company at
the same time we mail to shareholders of
record. To be placed on Vishay’s mailing list,
call 610-644-1300, extension 7483.
Shareholders with access to the Internet can
find quarterly reports, press releases, SEC
filings, and all other financial documents at
www.vishay.com.
SEC Form 10-K
A copy of the Company’s Form 10-K Annual
Report for the year ended December 31,
2000, filed with the Securities and Exchange
Commission, may be obtained by sharehold-
ers without charge by writing to the Investor
Relations Department, Vishay
Intertechnology, Inc., 63 Lincoln Highway,
Malvern, PA 19355-2120 or through Vishay’s
website at www.vishay.com.
Major Vishay Manufacturing Locations
Vishay Intertechnology, Inc.
Corporate Headquarters
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355-2120 USA
Phone 610-644-1300
Fax 610-296-0657
World Operating Headquarters
Vishay Electronic GmbH
Geheimrat-Rosenthal-Strasse 100
95100 Selb Germany
Phone 49-9287-71-0
Operating Headquarters:
Americas
Vishay Americas
One Greenwich Place
Shelton, CT 06484 USA
Phone 203-452-5664
Asia
Vishay Intertechnology Asia Pte Ltd.
25 Tampines Street 92
Keppel Building #02-00
Singapore 528877
Phone 65-788-6668
Europe
Vishay Electronic GmbH
Geheimrat-Rosenthal-Strasse 100
95100 Selb Germany
Phone 49-9287-71-0
Israel
Vishay Israel, Ltd.
2 Ha’Ofan Street
Holon 58814 Israel
Phone 972-3-557-0888
www.vishay.com
Americas:
Vishay Dale
1122 23rd Street
Columbus, NE 68601-3647 USA
Phone 402-564-3131
Vishay Foil Resistors
63 Lincoln Highway
Malvern, PA 19355-2120 USA
Phone 610-644-1300
Vishay Measurements Group
951 Wendell Boulevard
Wendell, NC 27591 USA
Phone 919-365-3800
Vishay Roederstein
2100 W. Front Street
Statesville, NC 28677 USA
Phone 704-872-8101
Vishay Siliconix
2201 Laurelwood Road
Santa Clara, CA 95056 USA
Phone 408-988-8000
Vishay Sprague
678 Main Street
Sanford, ME 04073 USA
Phone 207-324-4140
Vishay Thin Film
2160 Liberty Drive
Niagara Falls, NY 14304 USA
Phone 716-283-4025
Vishay Vitramon
10 Main Street
Monroe, CT 06468 USA
Phone 203-268-6261
Electronica Dale de Mexico
Los Bravos
Ave. de las Torres #1950
Col. Torres del Sur
Cd. Juarez, Chih, Mexico, C.P. 32170
Phone 915-783-5804
Asia:
Shanghai Simconix Electronic Co. Ltd.
Outside North Gate Jiading
Shanghai 201800 China
Phone 86-215-992-6999
Shanghai Vishay Semiconductor
501 Jiangchang West Road
Shanghai 200436 China
Phone 86-215-603-0910
Siliconix Taiwan Limited
3-3 East 2nd Street
Nan-Tze Export Processing Zone
Kaohsiung 81120
Taiwan R.O.C.
Phone 886-7-361-5101
Vishay (Philippines) Inc.
Bagsakan Road
FTI Estate
1630 Taguig
Metro Manila Philippines
Phone 632-838-7421
Europe:
Vishay Electronic GmbH
Division Draloric
Geheimrat-Rosenthal-Strasse 100
95100 Selb Germany
Phone 49-9287-71-0
´
Vishay Electronic spol. s.r.o.
Mlynská 1095
33401 Prestice Czech Republic
Phone 420-19-798-26-26
ˇ
Vishay Hungary Electronic Co. Ltd.
Fóti út 56
H-1047 Budapest Hungary
Phone 36-1-233-22-36
Vishay Israel, Ltd.
2 Ha’Ofan Street
Holon 58814 Israel
Phone 972-3-557-0888
Vishay S.A.
Division Sfernice
199, Blvd. de la Madeleine
B.P. 159
F06003 Nice Cedex 1 France
Phone 33-493-37-27-27
Vishay Semiconductor GmbH
Division Telefunken
Theresienstrasse 2
74072 Heilbronn Germany
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