<PAGE>
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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, AS AMENDED
For the quarterly period ended April 2, 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 1-333-36675
----------------
BURKE INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 94-3081144
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2250 SOUTH TENTH STREET
SAN JOSE, CALIFORNIA 95112
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 297-3500
----------------
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, as amended, 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 .
--- ---
As of May 14, 1999, the number of shares outstanding of the
Registrant's Common Stock was 3,894,500.
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<PAGE>
BURKE INDUSTRIES, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NUMBER
- ------ --------------------- -----------
<C> <S> <C>
Item 1 Financial Statements
Condensed Consolidated Statements of Operations
for the three months ended April 2, 1999 and
April 3, 1998 (unaudited) 3
Condensed Consolidated Balance Sheets as of
April 2, 1999 (unaudited) and January 1, 1999 4
Condensed Consolidated Statements of Cash Flows
for the three months ended April 2, 1999 and
April 3, 1998 (unaudited) 5
Notes to Condensed Consolidated Financial
Statements (unaudited) 6-7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Item 3 Quantitative and Qualitative Disclosures About
Market Risk 12
<CAPTION>
PART II OTHER INFORMATION
- ------- -----------------
<C> <S> <C>
Item 1 Legal Proceedings 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13
Signature 14
</TABLE>
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BURKE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Month Period Ended
--------------------------------------
April 2, 1999 April 3, 1998
------------------ -------------------
(Unaudited)
<S> <C> <C>
Net sales.................................................. $28,634 $22,943
Costs and expenses:
Cost of sales......................................... 20,430 16,180
Selling, general and administrative................... 4,517 3,247
Amortization of goodwill.............................. 504 9
------- ------
Income from operations..................................... 3,183 3,507
Interest expense, net...................................... 3,738 2,787
------- ------
Income (loss) before income tax provision
(benefit).................................................. (555) 720
Income tax provision (benefit)............................. (221) 288
------- ------
Net income................................................. $(334) $ 432
------- ------
------- ------
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.
3
<PAGE>
BURKE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 1, 1999
(Derived from
audited
April 2, 1999 financial
(Unaudited) statements)
------------- ---------------
(In thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................... $ 376 $ 2,981
Trade accounts receivable, less allowance of
$860 in 1999 and $812 in 1998..................................... 15,153 13,109
Inventories......................................................... 15,071 14,574
Other current assets................................................ 4,707 5,013
-------- --------
Total current assets.............................................. 35,307 35,677
Property, plant and equipment.......................................... 34,443 33,679
Accumulated depreciation and amortization.............................. 12,827 12,300
-------- --------
Net property, plant and equipment...................................... 21,616 21,379
Goodwill, net.......................................................... 29,231 29,735
Deferred financing costs, net.......................................... 6,336 6,542
Other assets........................................................... 612 612
-------- --------
Total assets...................................................... $ 93,102 $ 93,945
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Trade accounts payable and accrued expenses......................... $ 9,044 $ 6,934
Payable to shareholders............................................. 953 953
Other current liabilities........................................... 5,176 8,844
-------- --------
Total current liabilities......................................... 15,173 16,731
Fixed - Rate Senior notes.............................................. 110,000 110,000
Floating - Rate Senior notes........................................... 30,000 30,000
Other noncurrent liabilities........................................... 5,576 4,526
Preferred stock, no par value; 50,000 shares authorized; 30,000
Series A Redeemable shares designated; 16,000 Series A shares issued
and outstanding; 5,000 Series B Redeemable shares designated;
2,000 Series B shares issued and outstanding (aggregate liquidation
and redemption preference $18,000).................................. 18,663 18,160
Shareholders' equity (deficit):
Convertible preferred stock, no par value: 3,000 Series C shares
designated, issued and outstanding (liquidation preference $3,000). 3,000 3,000
Class A common stock, no par value: Authorized shares-20,000,000
issued and outstanding shares--3,857,000 in 1999 and 1998......... 25,464 25,464
Accumulated deficit.................................................... (114,774) (113,936)
-------- --------
Total shareholders' equity (deficit)................................ (86,310) (85,472)
-------- --------
Total liabilities and shareholders' equity (deficit).............. $ 93,102 $ 93,945
-------- --------
-------- --------
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.
4
<PAGE>
BURKE INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Month Period
Ended
-------------------------------
April 2, 1999 April 3, 1998
------------- -------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................................ $ (334) $ 432
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization:
Property, plant and equipment...................................... 527 357
Goodwill........................................................... 504 9
Debt financing costs............................................... 206 148
Other adjustments to reconcile net income (loss) to net cash used
in operating activities............................................... (2,744) (5,221)
-------- -------
Net cash used in operating activities.................................... (1,841) (4,275)
INVESTING ACTIVITIES
Purchases of property, plant and equipment............................... (764) (419)
-------- -------
Net cash used in investing activities.................................... (764) (419)
FINANCING ACTIVITIES
Restricted cash.......................................................... -- 1,070
Payable to shareholders.................................................. -- (3,934)
Deferred financing costs................................................. -- (121)
-------- -------
Net cash used in financing activities.................................... -- (2,985)
-------- -------
Decrease in cash......................................................... (2,605) (7,679)
Cash at beginning of period.............................................. 2,981 11,563
-------- -------
Cash at end of period.................................................... $ 376 $ 3,884
-------- -------
-------- -------
</TABLE>
The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.
5
<PAGE>
BURKE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of the
Company have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The condensed
consolidated balance sheet as of January 1, 1999 was derived from audited
financial statements. The accompanying condensed consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended January 1, 1999.
The financial information included herein reflects all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
period. The results of operations for the three months ended April 2, 1999
are not necessarily indicative of the results to be expected for the full
year.
The Company uses a 52 to 53-week fiscal year ending on the Friday
closest to December 31. The company also follows a thirteen-week quarterly
cycle. The three-month periods ended on April 3, 1998 and April 2, 1999.
2. INVENTORIES
Inventories consist of the following at the period ended:
<TABLE>
<CAPTION>
April 2, 1999 January 1, 1999
------------- ---------------
(In thousands)
--------------------------------
<S> <C> <C>
Raw materials................................................... $ 5,118 $ 5,123
Work-in-process................................................. 2,104 2,085
Finished goods.................................................. 7,849 7,366
------- -------
$15,071 $14,574
------- -------
------- -------
</TABLE>
3. SEGMENT INFORMATION
The Company has two reportable business segments: organic products
and silicone products. The organic products group produces and distributes
rubber and vinyl wall base, other floor covering accessory products, flexible
membranes and other organic rubber products. The silicone products group
produces and distributes precision silicone seals and other products used on
commercial and military aircraft as well as high performance silicone truck
and bus engine hoses and other silicone rubber products.
6
<PAGE>
BURKE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED APRIL 2, 1999 Organic Products Silicone Products Total
---------------- ----------------- --------
(Amounts in Thousands)
<S> <C> <C> <C>
Revenues from external customers............ $14,993 $13,641 $28,634
Segment profit.............................. 2,534 1,631 4,165
PROFIT
Total profit for reportable segments........ $ 4,165
Unallocated items:
Corporate general and administrative
expenses.................................. 478
Amortization of goodwill related to the
acquisition of Mercer..................... 504
Interest expense, net..................... 3,738
-------
Income before income taxes.................. $ (555)
-------
-------
<CAPTION>
THREE MONTH PERIOD ENDED APRIL 3, 1998 Organic Products Silicone Products Total
---------------- ----------------- --------
(Amounts in Thousands)
<S> <C> <C> <C>
Revenues from external customers............ $8,975 $13,968 $22,943
Segment profit.............................. 1,067 2,808 3,875
PROFIT
Total profit for reportable segments........ $ 3,875
Unallocated items:
Corporate general and administrative
expenses.................................. 368
Amortization of goodwill related to the
acquisition of Mercer..................... --
Interest expense, net..................... 2,787
-------
Income before income taxes.................. $720
-------
-------
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the
Company's Unaudited Condensed Consolidated Financial Statements and Notes
thereto included elsewhere in this Quarterly Report on Form 10-Q.
This Report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of
management as well as assumptions made by and information currently available
to management. The words "anticipates," "believes," "estimates," "expects,"
"plans," "intends," and similar expressions, as they relate to the Company or
its management, are intended to identify forward-looking statements. Such
statements reflect the current views of the Company, with respect to future
events and are subject to certain risks, uncertainties and assumptions, that
could cause actual results to differ materially from those expressed in any
forward-looking statement, including, without limitation: competition from
other manufacturers in the Company's aerospace, flooring or commercial
product lines, loss of key employees, general economic conditions and adverse
factors impacting the aerospace industry such as changes in government
procurement policies. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Company does not intend to update these
forward-looking statements.
RESULTS OF OPERATIONS
The Company operates within one industry segment, elastomer
products, and is organized into two business segments: silicone and organic
products. The Company's products are organized into three product groups:
Aerospace and Defense Products, which produces precision silicone seals and
other products used on commercial and military aircraft; Flooring Products,
which produces and distributes rubber and vinyl cove base and other floor
covering accessory products; and Commercial Products, which produces various
intermediate and finished silicone and organic rubber products.
The following table sets forth certain income statement information for
the Company for the three month period ended April 2, 1999 compared to the same
period in 1998:
<TABLE>
<CAPTION>
Fiscal First Quarter
---------------------------------------------------------------------
Percentage Percentage
1999 of Net Sales 1998 of Net Sales
---------------------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Net sales:
Aerospace and Defense Products......... $ 9,114 31.8% $ 9,551 41.6%
Flooring Products....................... 10,957 38.3% 5,842 25.5%
Commercial Products..................... 8,563 29.9% 7,550 32.9%
------------------------------ -------------------------------
Net sales.................................... 28,634 100.0% 22,943 100.0%
Cost of sales................................ 20,430 71.3% 16,180 70.5%
------------------------------ -------------------------------
Gross profit................................. 8,204 28.7% 6,763 29.5%
Selling, general and
administrative expenses.................... 4,517 15.8% 3,247 14.2%
Amortization of goodwill..................... 504 1.8% 9 0.0%
------------------------------ -------------------------------
Income from operations....................... 3,183 11.1% 3,507 15.3%
Interest expense............................. 3,738 13.1% 2,787 12.1%
------------------------------ -------------------------------
Income before income tax provision.......... (555) -2.0% 720 3.2%
Income tax provision......................... (221) -0.8% 288 1.3%
------------------------------ -------------------------------
Net income.................................. $ (334) -1.2% $ 432 1.9%
------------------------------ -------------------------------
------------------------------ -------------------------------
</TABLE>
8
<PAGE>
NET SALES. Total net sales increased 24.8%, from $22.9 million for
the three month period ended April 3, 1998 to $28.6 million for the same
period in 1999. Aerospace and Defense Products sales decreased 4.6%, from
$9.6 million for the three month period ended April 3, 1998 to $9.1 million
for the same period in 1999, due to decreases in demand for commercial
products, which were partially offset by increases in demand for military
products. Flooring Products sales increased 87.6%, from $5.8 million for the
three month period ended April 3, 1998 to $11 million for the same period in
1999, due to the acquisition of Mercer. Commercial Products sales increased
13.4%, from $7.6 million for the three month period ended April 3, 1998 to
$8.6 million for the same period in 1999, because of strong demand for the
company's organic custom-mixed products and volume associated with new
silicone hose products introduced late in the second quarter of 1998.
COST OF SALES. Cost of sales increased 26.3%, from $16.2 million for
the three month period ended April 3, 1998 to $20.4 million for the same
period in 1999. As a percentage of net sales, gross profit decreased from
29.5% for the three month period ended April 3, 1998 to 28.7% for the same
period in 1999. The decrease in profit percentage was primarily due to
temporary operating inefficiencies at the Company's Southern California
facilities; however, results at these facilities during the first quarter of
1999 improved over results during the fourth quarter of 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 39.1%, from $3.2 million for the three
month period ended April 3, 1998 to $4.5 million for the same period in 1999.
As a percentage of net sales, selling, general and administrative expenses
increased from 14.2% for the three month period ended April 3, 1998 to 15.8%
for the same period in 1999. The increase in percentage was due to the
acquisition of Mercer, because Flooring Products have higher distribution
costs than the Company's other product groups.
AMORTIZATION OF GOODWILL. Amortization of goodwill increased to $0.5
million for the three months ended April 2, 1999. The increase was due to the
acquisition of Mercer.
INCOME FROM OPERATIONS. As a result of the above factors, income
from operations decreased 9.2%, from $3.5 million for the three month period
ended April 3, 1998 to $3.2 million for the same period in 1999.
INTEREST EXPENSE. Interest expense increased 34.1%, from $2.8
million for the three month period ended April 3, 1998 to $3.7 million for
the same period in 1999. The increase was due to the issuance of the
Company's $30 million floating interest rate notes on April 21, 1998.
NET INCOME. As a result of the above factors, net income decreased from
$0.4 million for the three month period ended April 3, 1998 to a loss of $0.3
million for the same period in 1999.
INCOME TAX PROVISION (BENEFIT)
For the three month period ended April 2, 1999, the Company recorded
an income tax benefit of 40.0%, which represents the effective tax rate
projected for the full fiscal year 1999. This effective tax rate differs from
the federal statutory rate primarily due to state income taxes (net of
federal benefit) and is consistent with the effective tax rate for the three
month period ended April 3, 1998.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOW. The Company's principal uses of cash are to finance
working capital and capital expenditures related to asset acquisitions and
internal growth.
9
<PAGE>
CAPITAL REQUIREMENTS. The Company expects to spend approximately
$2.5 million during 1999 on capital expenditures not directly related to
acquisitions. Cash flow from operations, to the extent available, may also be
used to fund a portion of any acquisition expenditures.
SOURCES OF CAPITAL. Under a Loan and Security Agreement with
NationsBank, N.A., as administrative agent, and other lending institutions
party thereto, the Company has a borrowing capacity of $25.0 million (the
"Credit Facility"). The Credit Facility matures in August 2002. Interest on
loans under the Credit Facility bear interest at rates based upon either, at
the Company's options, Eurodollar Rates plus a margin of 2.5% or upon the
Prime Rate. Loans under the Credit Facility are secured by security interests
in substantially all of the assets of the Company and are guaranteed by any
and all current or future subsidiaries of the Company, which guarantees are
secured by substantially all of the assets of such subsidiaries. The Credit
Facility contains customary covenants restricting the Company's ability to,
among other things, incur additional indebtedness, create liens or other
encumbrances, pay dividends or make other restricted payments, make
investments, loans and guarantees or sell or otherwise dispose of a
substantial portion of assets to, or merge or consolidate with, another
entity. The Credit Facility also contains a number of financial covenants
that will require the Company to meet certain ratios and tests and provide
that a change of control of the Company (as defined in the Credit Facility)
will constitute an event of default.
The Company anticipates that its principal use of cash during 1999
will be working capital requirements, capital expenditures and debt service
requirements. Based upon current and anticipated levels of operations, the
Company believes that its cash flow from operations, together with amounts
available under the Credit Facility, will be adequate to meet its anticipated
requirements for the foreseeable future for working capital, capital
expenditures and interest payments.
YEAR 2000 ISSUE
GENERAL DESCRIPTION OF THE YEAR 2000 ISSUE AND THE NATURE AND
EFFECTS OF THE YEAR 2000 ON INFORMATION TECHNOLOGY (IT) AND NON-IT SYSTEMS
The Year 2000 issue ("Year 2000 Issue") is the result of computer
programs being written using two digits rather than four digits to define the
applicable year. Any of the Company's computer programs or hardware that have
date-sensitive software or embedded chips may recognize a date using "00" as
the year 1900 rather than the Year 2000. This could result in a system
failure or miscalculation causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices,
or engage in similar normal business activities.
Based on its assessments, the Company determined that it had to
modify or replace significant portions of its software and certain hardware
so that those systems will properly utilize dates beyond December 31, 1999.
The Company believes that with modifications or replacements of existing
software and certain hardware, the Year 2000 Issue can be mitigated. However,
if such modifications and replacements are not made, or are not timely
completed, the Year 2000 Issue could have a material impact on the operations
of the Company.
The Company's plan to resolve the Year 2000 Issue involves the
following three phases: assessment, remediation, and testing. The Company has
fully completed its assessment of all systems that could be significantly
affected by the Year 2000 Issue. The completed assessment indicated that most
of the Company's significant information technology systems could be
affected, particularly the general ledger, billing, and inventory systems.
That assessment also indicated that software and hardware
10
<PAGE>
(embedded chips) used in production and manufacturing systems do not
represent significant risks. The Company does not believe that the Year 2000
presents a material exposure as it relates to the Company's products.
STATUS OF PROGRESS IN BECOMING YEAR 2000 COMPLIANT
With respect to its information technology, the Company is 75%
complete on the remediation phase and expects to complete software and
hardware replacement no later than June 30, 1999. Completion of the testing
phase for all significant systems is expected by June 30, 1999.
The Company is utilizing both internal and external resources to
replace and test the software and hardware for resolution of the Year 2000
Issue. In conjunction with the Company's current $2.2 million information
technology systems re-engineering effort, approximately 50% of the total cost
is estimated to be related to the Year 2000 project. Most of the cost of the
new system has been funded through a lease.
NATURE AND LEVEL OF IMPORTANCE OF THIRD PARTIES AND THEIR EXPOSURE
TO THE YEAR 2000 ISSUE
The Company has no significant systems which would interface
directly with third party vendors. To date, the Company is not aware of any
external agent with a Year 2000 Issue that would materially impact the
Company's results of operations, liquidity, or capital resources. The Company
has sent out questionnaires to external agents during the first quarter of
1999 in an effort to verify the external agents' Year 2000 readiness.
However, the Company has no means of ensuring that the external agents will
be Year 2000 ready. The inability of external agents to complete their Year
2000 resolution process in a timely fashion could materially impact the
Company. The effect of non-compliance by external agents is not determinable.
RISKS
Management believes it has an effective program in place to resolve
the Year 2000 Issue in a timely manner. As noted above, the Company has not
yet completed all necessary phases of its Year 2000 program. In the event
that the Company does not complete any additional phases, the Company might
be unable to take customer orders, manufacture and ship products, invoice
customers or collect payments. In addition, disruptions in the economy
generally resulting from the Year 2000 Issue could also materially adversely
affect the Company. The amount of potential liability and lost revenue cannot
be reasonably estimated at this time.
CONTINGENCY PLANS
The Company currently has no contingency plans in place in the event
it does not complete all phases of the Year 2000 program. The Company plans
to evaluate the status of completion in the second quarter of 1999 and
determine whether such a plan is necessary.
11
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As reported by the Company in its Annual Report on Form 10-K for the
fiscal year ended January 1, 1999, the Company is exposed to market risks
related to fluctuations in interest rates on its $110 million aggregate
principal amount of fixed interest rate senior notes due 2007 ("Senior
Notes") and its $30 million aggregate principal amount of floating interest
rate notes due 2007 ("Floating-Rate Notes"). The Company does not currently
use interest rate swaps or other types of derivative financial instruments.
For fixed rate debt such as the Senior Notes, changes in interest
rates generally affect the fair value of the debt instrument. For variable
rate debt such as the Floating-Rate Notes, changes in interest rates
generally do not affect the fair value of the debt instrument, but do affect
earnings and cash flows. The Company does not have an obligation to repay its
Senior Notes prior to maturity in 2007 and, as a result, interest rate risk
and changes in fair value should not have a significant impact on the
Company. Management believes that the interest rate on the Senior Notes
approximates the current rates available for similar types of financing and
as a result the carrying amount of the Senior Notes approximates fair value.
The carrying value of the Floating-Rate Notes approximates fair value as the
interest rate is variable and resets frequently. The Floating-Rate Notes bear
interest at a rate per annum equal to LIBOR plus 400 basis points and each
one percentage point increase in interest rates would result in an increase
in interest expense of $300,000 per year.
Management does not believe that the future market rate risk related
to the Senior Notes and Floating-Rate Notes will have a material impact on
the Company's financial position, results of operations or liquidity.
12
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Legal proceedings filed against the Company were reported in the
Company's Annual Report on Form 10-K for the fiscal year ended January 1,
1999.
ITEM 5. OTHER INFORMATION.
Mr. Reed Wolthausen, a Director and Senior Vice President of the
Company, has recently been engaged in managing the Company's installation of
a new information system. With the installation expected to be completed by
June 30, 1999, Mr. Wolthausen has tendered his resignation as an employee and
director of the Company to pursue other opportunities. Mr. Wolthausen's
resignation will become effective on June 30, 1999. He will continue as a
consultant until completion of the installation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
EXHIBIT NO. DESCRIPTION
*3.1 Articles of Incorporation of the Company
*3.2 By-laws of the Company
27 Financial Data Schedule
____________
* Previously filed as an exhibit to the Company's Registration
Statement on Form S-4, File No. 333-36675, and incorporated
herein by reference.
(b) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K during the three months
ended April 2, 1999.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of San Jose,
State of California on the 17th day of May, 1999.
BURKE INDUSTRIES, INC.
By: /s/ DAVID E. WORTHINGTON
----------------------------
David E. Worthington
Vice President-Finance
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-02-1999
<PERIOD-END> APR-02-1999
<CASH> 376
<SECURITIES> 0
<RECEIVABLES> 16,013
<ALLOWANCES> 860
<INVENTORY> 15,071
<CURRENT-ASSETS> 35,307
<PP&E> 34,443
<DEPRECIATION> 12,827
<TOTAL-ASSETS> 93,102
<CURRENT-LIABILITIES> 15,173
<BONDS> 140,000
18,663
3,000
<COMMON> 25,464
<OTHER-SE> (114,774)
<TOTAL-LIABILITY-AND-EQUITY> 93,102
<SALES> 28,634
<TOTAL-REVENUES> 28,634
<CGS> 20,430
<TOTAL-COSTS> 20,430
<OTHER-EXPENSES> 4,973
<LOSS-PROVISION> 48
<INTEREST-EXPENSE> 3,738
<INCOME-PRETAX> (555)
<INCOME-TAX> (221)
<INCOME-CONTINUING> 3,183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (334)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
