UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______ to _______ Commission file number 1-5442 ------ General Semiconductor, Inc. --------------------------- (Exact name of registrant as specified in its charter) Delaware 13-3575653 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10 Melville Park Road, Melville, New York 11747 ----------------------------------------------- (Address of principal executive offices) (Zip Code) (516) 847-3000 -------------- (Registrant's telephone number, including area code) ---------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at April 21, 1999 - ----------------------------- ----------------------------- Common Stock, par value $0.01 36,820,778 GENERAL SEMICONDUCTOR, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q PAGES ----- PART I. FINANCIAL INFORMATION --------------------- Financial Statements Condensed Consolidated Balance Sheets at March 31, 1999 (unaudited) and December 31, 1998 2 Consolidated Statements of Operations for the Three Months ended March 31, 1999 and 1998 (unaudited) 3 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1999 and 1998 (unaudited) 4 Notes to Consolidated Financial Statements (unaudited) 5-9 Management's Discussion and Analysis of Financial Condition and Results of Operations 10-12 PART II. OTHER INFORMATION ----------------- Legal Proceedings 13 Exhibits 13 SIGNATURE 14 PART I FINANCIAL INFORMATION GENERAL SEMICONDUCTOR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, Except Stock Par Value) ASSETS (Unaudited) March 31, December 31, 1999 1998 --------- ---------- Current Assets: Cash ................................. $2,303 $3,225 Accounts receivable, less reserves of $736 and $769, respectively ................................................ 64,945 59,643 Inventories ................................................................ 42,467 39,514 Prepaid expenses and other current assets .................................. 11,932 12,010 Deferred income taxes ...................................................... 11,357 13,738 --------- --------- Total current assets .................................................. 133,004 128,130 Property, plant and equipment - net ........................................ 225,813 223,743 Excess of cost over fair value of net assets acquired, less accumulated amortization of $45,215 and $43,929, respectively ...................... 161,464 162,751 Deferred income taxes, net of valuation allowance .......................... 29,737 29,376 Intangibles and other assets, less accumulated amortization of $11,443 and $11,099, respectively .................................................. 18,331 19,447 --------- --------- TOTAL ASSETS ............................................................... $ 568,349 $ 563,447 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable ........................................................... $ 30,021 $ 31,343 Accrued expenses ........................................................... 36,427 45,084 --------- --------- Total current liabilities ............................................. 66,448 76,427 Long-term debt ............................................................. 297,000 286,000 Deferred income taxes ...................................................... 20,678 21,390 Other non-current liabilities .............................................. 74,624 74,283 --------- --------- Total liabilities ..................................................... 458,750 458,100 --------- --------- Commitments and contingencies Stockholders' Equity: Preferred Stock, $0.01 par value; 20,000 shares authorized; no shares issued -- -- Common Stock, $0.01 par value; 400,000 shares authorized; 36,925 shares issued ......................................................... 369 369 Retained earnings .......................................................... 116,094 111,842 Other stockholder's equity ................................................. (6,864) (6,864) --------- --------- --------- --------- 109,599 105,347 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................. $ 568,349 $ 563,447 ========= ========= See notes to consolidated financial statements. GENERAL SEMICONDUCTOR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - In Thousands, Except Per Share Data) Three Months Ended March 31 -------------------------- 1999 1998 ------------- ------------ NET SALES .............................................$ 96,961 $ 106,397 OPERATING COSTS AND EXPENSES: Cost of sales ..................................... 72,477 71,108 Selling, general and administrative ............... 10,963 12,964 Research and development .......................... 1,460 1,500 Amortization of excess of cost over fair value of net assets acquired ......................... 1,286 1,286 --------- --------- Total operating costs and expenses ........... 86,186 86,858 --------- -------- OPERATING INCOME ...................................... 10,775 19,539 Other income (expense) - net .......................... (58) (69) Interest expense-net .................................. (5,048) (4,907) ---------- --------- INCOME BEFORE INCOME TAXES ........................... 5,669 14,563 Provision for income taxes ........................... (1,417) (5,097) ========== ========= NET INCOME ........................................... $ 4,252 $ 9,466 ========== ========= Weighted Average Shares Outstanding: Basic .............................................. 36,820 36,791 Diluted ............................................ 36,844 36,904 Earnings per share: Basic .............................................. $ 0.12 $ 0.26 Diluted ............................................ $ 0.12 $ 0.26 See notes to consolidated financial statements. GENERAL SEMICONDUCTOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In Thousands) Three Months Ended March 31, --------------------------------- 1999 1998 --------------- -------------- OPERATING ACTIVITIES: Income from continuing operations $ 4,252 $ 9,466 Adjustments to reconcile to net cash from continuing operating activities: Depreciation and amortization 6,740 6,074 Changes in assets and liabilities: Accounts receivable (5,302) (8,920) Inventories (2,953) 181 Prepaid expenses and other current assets 78 (1,959) Other non-current assets 776 (137) Deferred income taxes 1,308 1,075 Accounts payable and accrued expenses (7,034) (3,234) Restructuring (2,945) - Other non-current liabilities 339 (2,164) Other (394) 120 ---------------- --------------- Net cash (used in) provided by continuing operating activities (5,135) 502 ---------------- --------------- Cash used in discontinued operations - (6,553) ---------------- --------------- INVESTING ACTIVITIES: Expenditures for property, plant and equipment (6,787) (3,797) ---------------- --------------- Net cash used in investing activities (6,787) (3,797) ---------------- --------------- FINANCING ACTIVITIES: Net proceeds from revolving credit facilities 11,000 52,000 Principal repayment of debt - (46,074) Exercise of stock options - 257 ---------------- --------------- Net cash provided by financing activities 11,000 6,183 ---------------- --------------- Decrease in cash and cash equivalents (922) (3,665) ---------------- --------------- Cash and cash equivalents, beginning of period 3,225 5,192 ---------------- --------------- Cash and cash equivalents, end of period $ 2,303 $ 1,527 ================ =============== See notes to consolidated financial statements. GENERAL SEMICONDUCTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (All amounts in thousands, except per share data) 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION General Semiconductor, Inc. ("General Semiconductor" or the "Company") is a market leader in the discrete segment of the semiconductor industry. The Company designs, manufactures and sells low-to medium-power rectifiers, transient voltage suppressors ("TVS"), small signal diodes, and transistors and zener diodes in axial, bridge, power and surface mount packages. Power rectifiers, small signal devices and TVS products are semiconductors that are essential components of most electronic devices and systems. Rectifiers convert alternating current (AC) into direct current (DC) which can be utilized by electronic equipment. TVS devices provide protection from electrical surges, ranging from electrostatic discharge to induced lightning. Small signal devices amplify or switch low level currents. The Company's products are primarily targeted for use in the computer, automotive, telecommunications, lighting and consumer electronics industries. In the opinion of management, the accompanying unaudited consolidated financial statements include all necessary adjustments (consisting of normal recurring adjustments) and present fairly the Company's financial position as of March 31, 1999, the results of its operations for the three months ended March 31, 1999 and 1998, and its cash flows for the three months ended March 31, 1999 and 1998 in conformity with generally accepted accounting principles for interim financial information applied on a consistent basis. There were no adjustments of a non-recurring nature recorded during the three months ended March 31, 1999 and 1998. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in General Semiconductor's Annual Report on Form 10-K/A for the year ended December 31, 1998. 2. INVENTORIES Inventories consist of: March 31, 1999 December 31, 1998 -------------- ----------------- Raw materials $ 6,239 $ 5,139 Work in process 13,928 14,181 Finished goods 22,300 20,194 ------- ------- $42,467 $39,514 ======= ======= 3. LONG-TERM DEBT The Company entered into two interest rate swap transactions with a term of one year beginning on January 22, 1998 pursuant to which it paid a fixed interest rate averaging 5.96% on a notional amount of $100 million. The Company began receiving interest on the $100 million notional amount based on a three month LIBOR rate set quarterly beginning on January 22, 1998. During February 1998, the Company purchased an interest rate cap with a notional amount of $50 million. The cap became effective on April 27, 1998 with a term of nine months. Under the terms of the cap, the Company received from the counterparty the incremental amount, if any, associated with the three month LIBOR rate in excess of 6% on the notional amounts. The cost of the cap was immaterial. The effect of the swap agreements and the cap to the Company was to reduce its amount of debt subject to floating interest rates. 4. LITIGATION A securities class action is presently pending in the United States District Court for the Northern District of Illinois, Eastern Division, In Re General Instrument Corporation Securities Litigation. This action, which consolidates numerous class action complaints filed in various courts between October 10 and October 27, 1995, is brought by plaintiffs, on their own behalf and as representatives of a class of purchasers of GI common stock during the period March 21, 1995 through October 18, 1995. The complaint alleges that prior to the Distribution, GI and certain of its officers and directors, as well as Forstmann Little & Co. and certain related entities, violated the federal securities laws, namely, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), by allegedly making false and misleading statements and failing to disclose material facts about GI's planned shipments in 1995 of its CFT-2200 and DigiCipher II products. Also pending in the same court, under the same name, is a derivative action brought on behalf of GI. The derivative action alleges that the members of GI's Board of Directors, several of its officers and Forstmann Little & Co. and related entities have breached their fiduciary duties by reason of the matter complained of in the class action and the defendants' alleged use of material non-public information to sell shares of GI common stock for personal gain. An action entitled BKP Partners, L.P. v. General Instrument Corp. was brought in February 1996 by certain holders of preferred stock of Next Level Communications ("NLC"), which was merged into a subsidiary of GI in September 1995. The action was originally filed in the Northern District of California and was subsequently transferred to the Northern District of Illinois. The plaintiffs allege that the defendants violated federal securities laws by making misrepresentations and omissions and breached fiduciary duties to NLC in connection with the acquisition of NLC by GI. Plaintiffs seek, among other things, unspecified compensatory and punitive damages and attorney's fees and costs. In connection with the Distribution, General Instrument (formerly "NextLevel Systems, Inc.") agreed to indemnify the Company with respect to its obligations, if any, arising out of or relating to In Re General Instrument Corporation Securities Litigation (including the derivative action), and the BKP Partners, L.P. v. General Instrument Corp. litigation. Therefore, management is of the opinion that the resolution of these matters will have no effect on the Company's consolidated financial position, results of operations or cash flows. General Semiconductor is not a party to any pending legal proceedings other than various claims and lawsuits arising in the normal course of business and those for which they are indemnified. Management is of the opinion that such litigation or claims will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. 5. COMMITMENTS AND CONTINGENCIES The Company is subject to various federal, state, local and foreign laws and regulations governing environmental matters, including the use, discharge and disposal of hazardous materials. The Company's manufacturing facilities are believed to be in substantial compliance with current laws and regulations. Complying with current laws and regulations has not had a material adverse effect on the Company's financial condition. In connection with the Distribution, the Company retained the obligations with respect to environmental matters relating to its discontinued operations and its status as a "potentially responsible party." The Company is presently engaged in the remediation of eight discontinued operations in six states, and is a de minimus "potentially responsible party" at five hazardous waste sites in four states. The Company has engaged independent consultants to assist management in evaluating potential liabilities related to environmental matters. Management assesses the input from these independent consultants along with other information known to the Company in its effort to continually monitor these potential liabilities. Management assesses its environmental exposure on a site-by-site basis, including those sites where the Company has been named as a "potentially responsible party". Such assessments include the Company's share of remediation costs, information known to the Company concerning the size of the hazardous waste sites, their years of operation and the number of past users and their financial viability. The Company has a reserve recorded for environmental matters of $31.6 million at March 31, 1999 ($31.9 million at December 31, 1998). While the ultimate outcome of these matters cannot be determined, management does not believe that the final disposition of these matters will have a material adverse effect on the Company's financial position, results of operations or cash flows beyond the amounts previously provided for in the financial statements. The Company's present and past facilities have been in operation for many years, and over that time in the course of those operations, such facilities have used substances which are or might be considered hazardous, and the Company has generated and disposed of wastes which are or might be considered hazardous. Therefore, it is possible that additional environmental issues may arise in the future, which the Company cannot now predict. 6. EARNINGS PER SHARE Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the applicable periods. Diluted earnings per share computations are based on net income divided by the weighted average number of common shares outstanding adjusted for the dilutive effect of stock options. The diluted earnings per share calculation assumes the exercise of stock options using the treasury stock method. Set forth below are reconciliations of the numerators and denominators of the basic and diluted per share computations for the three months ended March 31, 1999 and 1998. For the Three Months For the Three Months Ended March 31, 1999 Ended March 31, 1998 -------------------- -------------------- Income Shares Per-Share Income Shares Per-Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------- ------------- --------- ----------- ------------- ------- Basic EPS Income available to common stockholders $4,252 36,820 $0.12 $9,466 36,791 $0.26 ===== ===== Effect of Dilutive Securities Options -- 24 -- 113 ------ ------- ------ ------ Diluted EPS Income available to common stockholders $4,252 36,844 $0.12 $9,466 36,904 $0.26 ====== ====== ===== ====== ====== ===== 7. GEOGRAPHIC SEGMENT INFORMATION General Semiconductor is engaged in one industry segment, specifically, the design, manufacture and sale of discrete semiconductors. The Company manages its business on a geographic basis. Summarized financial information for the Company's reportable geographic segments is presented in the following table. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10K/A for the year ended December 31, 1998. Net sales by reportable geographic segment reflect the originating source of the unaffiliated sale. Intercompany transfers represent the originating geographic source of the transfer and principally reflect product assembly which is accounted for at cost plus a nominal profit. In determining earnings (loss) before provision for income taxes for each geographic segment, sales and purchases between areas have been accounted for on the basis of internal transfer prices set by the Company. United States Europe Far East China Corporate Consolidated ------ ------ -------- ----- --------- ------------ Qtr.ended March 31, 1999: Net sales(a)............ $49,688 $32,921 $14,352 $ - $ - $ 96,961 Intercompany transfers.. 31,606 33,360 40,012 9,139 (114,117) - ------- ------- ------- ------ ---------- -------- Net sales............. 81,294 66,281 54,364 9,139 (114,117) $ 96,961 ======= ======= ======= ====== ========== ======== Interest income......... - 21 - 5 - 26 Interest expense........ - 66 10 - 4,998 5,074 Depreciation and amortization expense.. 2,349 1,346 2,239 806 - 6,740 Earnings (loss) before provision for income taxes.......... (393) 631 4,067 1,364 - 5,669 Income tax expense..... $ (511) $ 460 $ 1,460 $ 8 $ - $ 1,417 Qtr. ended March 31, 1998: Net sales(a)............ $62,665 $37,844 $ 5,888 $ - $ $106,397 Intercompany transfers.. 26,474 36,677 41,137 5,359 (109,647) - ------- ------- ------- ------ ---------- -------- Net sales............. 89,139 74,521 47,025 5,359 (109,647) 106,397 ======= ======= ======= ====== ========== ======== Interest income......... - (15) - 6 79 70 Interest expense........ - 51 546 - 4,380 4,977 Depreciation and amortization expense.. 2,167 1,180 2,142 585 - 6,074 Earnings before provision for income taxes.......... 10,497 1,583 1,480 1,003 - 14,563 Income tax expense..... $ 3,616 $ 650 $ 831 $ - $ - $ 5,097 (a) Included in United States net sales are export sales as follows: 1999 1998 ---- ---- Taiwan $13,827 $21,739 China 8,532 7,656 ------- ------- $22,359 $29,395 ======= ======= Net sales, by country, within the European geographic segment are: 1999 1998 ---- ---- France $ 4,960 $ 5,800 Germany 23,482 25,648 U.K. 4,479 6,396 ------- ------- $32,921 $37,844 ======= ======= 8. RECENT ACCOUNTING PRONOUNCEMENTS During 1998 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities". SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities and requires that an entity recognize all derivatives as either assets or liabilities and measure those instruments at fair value. SFAS 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Company is evaluating the impact SFAS 133 will have on its financial statements. GENERAL SEMICONDUCTOR, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management's Discussion and Analysis pertains to the continuing operations of General Semiconductor, Inc., unless otherwise noted, and describes changes in the Company's financial condition since December 31, 1998. RESULTS OF OPERATIONS: NET SALES Net sales of $97.0 million for the three months ended March 31, 1999 decreased $9.4 million from $106.4 million for the comparable prior year period. The decrease is primarily due to lower worldwide average selling prices (approximating 15%) partly offset by increased volume in the Asia/Pacific region and favorable foreign exchange rate fluctuations in Europe and Japan. COST OF SALES Cost of sales for the three months ended March 31, 1999 of $72.5 million compares to $71.1 million for the corresponding prior year period. Cost of sales increased $1.4 million principally due to an approximate 2% increase in unit volume. Accordingly, gross margin for the three months ended March 31, 1999 represents 25.3% of net sales compared with 33.2% in the comparable prior period. This decrease relates to an erosion of worldwide average selling prices partially offset by a change in the mix of products sold, continued cost controls and savings achieved from the 1998 restructuring. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses of $11.0 million for the three months ended March 31, 1999 decreased from $13.0 million for the comparable prior year period. The $2.0 million decrease is due primarily to reduced variable compensation corresponding with lower revenues as well as cost savings achieved from the 1998 restructuring. NET INTEREST EXPENSE Net interest expense increased to $5.0 million for the three months ended March 31, 1999 from $4.9 million for the corresponding prior year period. While the average debt balance outstanding was higher during the three months ended March 31, 1999 compared with the corresponding prior year period, borrowing rates were lower resulting in relatively stable net interest expense. INCOME TAXES The provision for income taxes is computed utilizing the Company's expected annual effective income tax rate. The Company's effective tax rate for the three months ended March 31, 1999 decreased to 25% from 35% for the three months ended March 31, 1998 due primarily to an increased proportion of income of foreign subsidiaries taxed at rates lower than the U.S. rate. LIQUIDITY AND CAPITAL RESOURCES Working capital at March 31, 1999 was $66.6 million compared to $51.7 million at December 31, 1998. The working capital increase of $14.9 million resulted primarily from increases in accounts receivable and inventory and a decrease in accrued expenses. As a result, the current ratio increased to 2.0 to 1 at March 31, 1999 compared with 1.7 to 1 at December 31, 1998. During the three months ended March 31, 1999 the Company invested $6.8 million in property, plant and equipment compared with $3.8 million for the corresponding prior year period. The Company currently plans to invest approximately $30.0 million in capital expenditures for the year ended December 31, 1999 principally for certain capacity expansions and automation. At March 31, 1999 there were $11.0 million of letters of credit outstanding that reduce the amount that can be borrowed against its $350.0 million credit facility. General Semiconductor's primary cash needs on both a short and long-term basis are for capital expenditures and other general corporate purposes. The Company believes that it has adequate liquidity to meet its current and anticipated needs from the results of its operations, working capital and the existing credit facility. There can be no assurance, however, that future industry-specific developments or general economic trends will not adversely affect the Company's operations or its ability to meet its cash requirements. YEAR 2000 The Company recognizes the importance of ensuring that neither its customers nor its business operations are disrupted as a result of the Year 2000 phenomenon. This phenomenon is a result of computer programs having been written using two digits (rather than four) to define the applicable year. Any information technology ("IT") systems that have time sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in miscalculations and systems failures. The problem also extends to many "non-IT" systems such as operating and control systems that rely on embedded chip systems. The Company, with the assistance of outside consulting resources, is centrally coordinating activities directed toward achieving global Year 2000 compliance. The primary areas of potential impact include business application systems, production equipment systems, suppliers, financial institutions, government agencies and environmental support organizations. None of the Company's products contain date sensitive or date processing logic. In 1996 the Company began an upgrade of its business applications software which includes the implementation of the full suite of JD Edwards ("JDE") financial, distribution and manufacturing applications. The JDE software was selected to add worldwide functionality and efficiency to the business processes of the Company as well as address Year 2000 exposure. The JDE financial and distribution modules have been installed and are Year 2000 compliant. The JDE manufacturing module will be installed in 2000. The Company is currently modifying its existing manufacturing applications and expects them to be Year 2000 compliant by June 30, 1999. Since the Company's financial, distribution and manufacturing applications are expected to be Year 2000 compliant, incremental costs associated with achieving Year 2000 compliance beyond the scope of this project (estimated at less than $1.0 million) should not have a material effect on the Company's financial condition or results of operations and are being expensed as incurred. The Company has surveyed its suppliers, financial institutions, government agencies and others with which it does business to determine their Year 2000 readiness and coordinate conversion efforts. Approximately 65% of third party suppliers have responded to the Company's surveys. At the current time, respondents critical to the operations of the Company have indicated that they are, or reasonably believe that they will be, Year 2000 compliant. If a material risk arises, the Company is prepared to perform on-site visits to validate the accuracy of the information received and will test such systems where appropriate and possible. Additionally, the Company has established programs to ensure that future purchases of equipment and software are Year 2000 compliant. Costs incurred have been insignificant to date. At the current time, it is difficult for the Company to specifically identify its most reasonably likely worst case Year 2000 scenario. The Company does not expect Year 2000 issues to have a material adverse effect on its products, services, competitive position, financial condition or results of operations. However, the Company can give no assurance that the systems of other companies or government agencies on which the Company relies will be converted on time or that a failure to convert by another company or a conversion that is incompatible with the Company's systems would not have a material adverse effect on the Company. The disclosures contained herein constitute Year 2000 Readiness Statements pursuant to the Year 2000 Information and Readiness Disclosure Act, Public Law 105-271. NEW EUROPEAN CURRENCY A new European currency (Euro) was introduced in January 1999 to replace the separate currencies of eleven individual countries. The Company will need to modify its payroll, benefits and pension systems, contracts with suppliers and customers, and internal financial reporting systems to be able to process transactions in the new currency. A three-year transition period is given during which transactions may be made in the old currencies. This may require dual currency processes until the conversion is complete. The Company is identifying the issues involved and intends to develop and implement solutions. The cost of this effort is not expected to be material and will be expensed as incurred. There can be no assurance, however, that all problems will be foreseen and corrected, or that no material disruption of the Company's business will occur. The conversion to the Euro may have competitive implications on our pricing and marketing strategies; however, any such impact is not known at this time. FORWARD LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. The Company's Form 10-K for the year ended December 31, 1998, the Company's 1998 Annual Report to Stockholders, this and any other Form 10-Q or Form 8-K of the Company, or any oral or written statements made by or on behalf of the Company, may include forward looking statements which reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are identified by their use of such terms and phrases as "intends," "intend," "intended," "goal," "estimate," "estimates," "expects," "expect," "expected," "project," "projects," "projected," "projections," "plans," "anticipates," "anticipated," "should," "designed to," "foreseeable future," "believe," "believes", "scheduled" and similar expressions. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Reference is made to the cautionary statements contained in Exhibit 99 to this Form 10-Q for a discussion of the factors that may cause actual results to differ from the results discussed in these forward looking statements. PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- See Part I, Note 4 to the Consolidated Financial Statements. Item 6. Exhibits (a) Exhibits 27 Financial Data Schedule 99 Forward Looking Information (b) Reports on Form 8-K No reports on Form 8-K were filed by the Registrant during the three months ended March 31, 1999. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GENERAL SEMICONDUCTOR, INC. April 22, 1999 /s/Andrew M. Caggia - -------------- ------------------- Date Andrew M. Caggia Senior Vice President and Chief Financial Officer Signing both in his capacity as Senior Vice President on behalf of the Registrant and as Chief Financial Officer of the Registrant