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