General Semiconductor Announces Fourth Quarter 1998 Earnings

Business Wire, Feb 3, 1999

MELVILLE, N.Y.--(BUSINESS WIRE)--Feb. 3, 1999--General Semiconductor, Inc. (NYSE:SEM), a leading manufacturer of discrete semiconductors, today reported net sales for the quarter ended December 31, 1998 of $98.8 million, versus $103.6 million reported in the comparable quarter of 1997.

During the quarter, a $12.3 million pre-tax, or $0.23 per share after tax restructuring charge was taken to better position the Company for the current environment. The majority of the restructuring charge was for early retirement and reduction-in-force severance packages. Before the charge, fourth quarter operating income was $11.9 million versus $19.6 million in the comparable period of 1997 and earnings per share were $0.13 compared with $0.25 a year earlier.

On a sequential basis, net sales for the fourth quarter of 1998 increased 1.6% from the $97.2 million reported in the third quarter. Operating income before the restructuring charge was down slightly from the $12.4 million in the third quarter. Earnings per share before restructuring decreased 18.8% from the $0.16 per share reported in the third quarter. Third quarter earnings included $0.03 per share due to a reduction of the estimated annual effective tax rate.

Net sales for the year increased 5.6% to $401.1 million from $380.0 million in 1997. Before the restructuring charge, operating income was $59.5 million compared with 1997's pro forma $68.th the spin-offs that were completed in July 1997.

"We performed well in an environment plagued by excelization will slowly improve due to increased ety and customer service with sales, reflecting our commitment to the customer. As markets firm, this commitment, along with a focus on continual cost improvement, will enhance our position as a major participant in the discrete component industry."

"During the fourth quarter, we saw a strengthening in our business in Southeast Asia, partic during the fourth quarter, primarily reflectinny provides customers with a broad array of power rectifiers, transient voltage suppressors and small signal transistors and diodes. It has a diversified customer base, in terms of geography and end-use markets. Customers include leading manufacturers, located around the globe, of conation and, accordingly, the cautionary statementsults could differ materially from the "forward-looking" information in this press release.

Visit GeONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Information)

ths Ended

December 31, December 31,

COSTS AND EXPENSES: ,287 1,286 1,287

Restructuring 12,324 - -

Total operating

costs and expenses 99,144 84,029 86,820

OPERATING INCOME (LOSS) (382) 19,56

INCOME (LOSS) Weighted Average 36,828

36,902

Earnings (loss) per share:

Basic $ (0.10) $ 0.25 $ 0.13

Diluted $ (0.10) $ 0.25 $ 0.13

(A) - Excludes restructuring charges.

-0-

GENERAL SEMICONDUCTOR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Information)

Historical As Adjusted As Adjusted

Year Ended Year Ended Year Ended

Dec. 31, Dec. 31, Dec. 31,

1998 1997 1998 (A) 1997 (B)

NET SALES $401,144 $ 380,038 $401,144 $380,038

OPERATING COSTS AND EXPENSES:

Cost of sales 283,582 289,313 283,582 289,313

Selling, general

and administrative 46,802 44,668 46,802 44,668

Research and development 6,104 5,998 6,104 5,998

Amortization of excess

of cost over fair value

of net assets acquired 5,145 5,143 5,145 5,143

Restructuring 12,324 - - -

Total operating

costs and expenses 353,957 345,122 341,633 345,122

OPERATING INCOME 47,187 34,916 59,511 34,916(C) Other income (expense)-net (71) (42) (71) (42) Interest expense-net (20,026) (14,353) (20,026) (19,602)

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 27,090 20,521 39,414 15,272

Provision for income taxes (8,556) (11,649) (12,220) (9,707)

INCOME FROM CONTINUING OPERATIONS 18,534 8,872 $ 27,194 $ 5,565(C)

DISCONTINUED OPERATIONS - NET - (2,939)(D)

NET INCOME $ 18,534 $ 5,933

Weighted Average Shares Outstanding:

Basic 36,811 35,414 36,811 36,881(B)

Diluted 36,899 35,576 36,899

Basic earnings (loss) per share:

Continuing operations $ 0.50 $ 0.25 $ 0.74 $ 0.15(C)

Discontinued operations $ - (0.08)

Net Income (loss) $ 0.50 $ 0.17

Diluted earnings per share:

Continuing operations $ 0.50 $ 0.25 $ 0.74

Discontinued operations $ - $ (0.08)

Net Income $ 0.50 $ 0.17