General Semiconductor Reports Third Quarter 1997 Earnings

Business Wire, Oct 29, 1997

MELVILLE, N.Y.--(BUSINESS WIRE)--Oct. 29, 1997--General Semiconductor, Inc. (NYSE: SEM) reported net sales for the quarter ended September 30, 1997 of $95.6 million compared with $84.7 million in the third quarter of 1996.

Operating income for the third quarter of 1997 was $17.4 million compared with $20.6 million in the comparable quarter of 1996.

Pro forma income from continuing operations for the third quarter of 1997 was $8.0 million or $0.22 per share, fully diluted, versus $9.2 million or $0.25 per share, fully diluted, in the third quarter of 1996. All per share figures in this release have been adjusted to reflect the 1-for-4 reverse stock split that was effected on July 25 1997, the date of the spin-off.

"We were pleased with the increase in net sales as well as the fact that our orders in the third quarter were up nearly 50% from the comparable year earlier quarter, providing positive momentum for the coming quarter," said Ronald A. Ostertag, Chairman and CEO of General Semiconductor. "Strong unit shipments resulted in a 13% increase in sales, despite price declines of 15%."

For the nine months ended September 30, 1997, General Semiconductor's sales were $276.4 million compared with $282.6 million in the comparable 1996 period. Before restructuring charges, operating income was $49.1 million for the nine month period versus $71.0 million in 1996. Pro forma net income from continuing operations was $21.8 million versus $33.2 million in 1996. Competitive pricing pressures offset significant volume increases for the nine month period, resulting in lower operating income.

The charges recorded in the nine months ended September 30, 1997 for the restructuring were $25.3 million after tax, or $0.69 per share, resulting in a reported pro forma loss from continuing operations of $3.5 million or $0.10 per share.

For the nine month period, orders strengthened from the depressed conditions of 1996, increasing more than 55% from the year earlier comparable period.

General Semiconductor's acquisition of the small signal transistor business from ITT Industries, Inc. for $8 million was completed on October 1, 1997. Trailing 12-month revenue for the business was approximately $60 million. With this acquisition, General Semiconductor has nearly tripled the market in which it participates from $2.6 billion to $7.7 billion. The Company now participates in approximately 59% of the $13 billion worldwide discrete semiconductor market.

"This acquisition is a very important step in implementing our growth strategy," said Ronald A. Ostertag, Chairman and Chief Executive Officer. "It provides us a unique opportunity to increase customer service as well as to leverage our excellent sales and distribution capabilities. We have a world-class customer list. By broadening our product offering, we will allow our customers to consolidate their buying process."

General Semiconductor opened a new $29 million plant in China on October 22. Located in Tianjin, the 120,000 square foot facility will initially employ 759 workers and manufacture bridge rectifiers, previously assembled by subcontractors. Over time, production will be expanded to include other products in the Company's portfolio.

General Semiconductor, Inc. is a market leader in the discrete segment of the semiconductor industry, with manufacturing facilities in China, France, Germany, Ireland, Taiwan and the United States. Created in the July, 1997 restructuring of General Instrument Corporation, the company has a strong sales presence in every part of the globe. It provides customers around the world with a broad range of rectifiers, transient voltage suppressors and small signal transistors. Its customers include leading manufacturers of consumer electronics, lighting, telecommunication equipment, computers, automobiles and automobile aftermarket products.

The information set forth above includes "forward-looking" information and, accordingly, the cautionary statements contained in Exhibit 99 to the Company's Form 10-Q for the quarter ended June 30, 1997 are incorporated herein by reference. General Semiconductor's actual results could differ materially from the "forward-looking" information in this press release.

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