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 October 1, 1994
or
_______ Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 0-11438
BURR-BROWN CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 86-0445468
________________________ _______________________
(State of Incorporation) (IRS Employer I.D. No.)
6730 S. Tucson Boulevard
Tucson, Arizona 85706
________________________________________
(Address of principle executive offices)
(602) 746-1111
_______________________________
(Registrant's telephone number)
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 not including shares held in treasury, as of the close of the
period covered by this report.
Common Stock, $0.01 par value 9,542,536 Shares
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BURR-BROWN CORPORATION AND SUBSIDIARIES
INDEX
Page #
PART 1. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Financial Position,
October 1, 1994 and December 31, 1993 3
Consolidated Statements of Operations, three months and
nine months ended October 1, 1994 and October 2, 1993 4
Consolidated Statements of Cash Flows, nine
months ended October 1, 1994 and October 2, 1993 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit 11: Computation of Consolidated Earnings Per Share 9
(b) Reports on Form 8-K: The Company did not file any reports
on Form 8-K during the quarter ended October 1, 1994
SIGNATURES
Signature Page 10
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<TABLE>
PART 1. FINANCIAL INFORMATION
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Thousands of dollars)
<CAPTION>
OCT 1, DEC 31,
1994 1993
________ ________
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 16,854 $ 13,066
Trade Receivables 40,513 34,822
Inventories 41,729 44,036
Deferred Income Taxes 1,091 1,011
Other Current Assets 3,122 2,091
________ ________
Total Current Assets $103,309 $ 95,026
Land, Buildings and Equipment
Land 3,398 3,378
Buildings and Improvements 21,803 20,818
Equipment 85,173 76,853
________ ________
110,374 101,049
Less Accumulated Depreciation (67,414) (58,622)
________ ________
42,960 42,427
Other Assets 4,942 4,609
________ ________
$151,211 $142,062
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 17,068 $ 15,000
Accounts Payable 11,723 9,064
Accrued Expenses 9,978 9,610
Accrued Employee Compensation and Payroll Taxes 4,223 4,284
Income Taxes Payable 1,790 3,593
Current Portion of Long-Term Debt 5,066 2,923
________ ________
Total Current Liabilities 49,848 44,474
Long-Term Debt 5,909 8,802
Deferred Gain 4,490 5,612
Deferred Income Taxes 1,208 1,194
Other Long-Term Liabilities 3,199 2,429
Commitments and Contingencies - -
Stockholders' Equity
Preferred Stock - -
Common Stock 97 97
Additional Paid-In Capital 26,124 26,013
Retained Earnings 52,377 49,605
Equity Adjustment From Foreign Currency Translation 3,673 2,083
Current Earnings 5,405 2,817
Treasury Stock (1,119) (1,064)
________ ________
86,557 79,551
________ ________
$151,211 $142,062
<FN>
See Notes to Consolidated Financial Statements.
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BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Thousands of dollars except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
Oct 1, Oct 2, Oct 1, Oct 2,
1994 1993 1994 1993
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net Sales $ 49,217 $ 42,935 $144,179 $127,701
Cost of Sales 28,040 22,645 77,318 66,779
________ ________ ________ ________
Gross Profit 21,177 20,290 66,861 60,922
Expenses:
Sales and Marketing 9,807 9,165 28,766 27,424
Product Development 5,386 5,108 15,898 14,389
General and Administrative 3,657 4,395 12,737 13,150
________ ________ ________ ________
18,850 18,668 57,401 54,963
Income From Operations 2,327 1,622 9,460 5,959
Interest Expense (424) (592) (1,467) (1,830)
Other Income (Expense) 160 68 (486) (543)
________ ________ ________ ________
Income Before Income Taxes 2,063 1,098 7,507 3,586
Provision for Income Taxes 359 494 2,102 1,614
________ ________ ________ ________
Net Income $ 1,704 $ 604 $ 5,405 $ 1,972
Earnings Per Common Share $ 0.18 $ 0.06 $ 0.56 $ 0.21
Shares Used in Per Common
Share Calculation 9,681,000 9,556,000 9,651,000 9,604,000
<FN>
See Notes to Consolidated Financial Statements.
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BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of dollars)
<CAPTION>
Nine Months Ended
Oct 1, Oct 2,
1994 1993
________ ________
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 5,405 $ 1,972
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 7,751 7,385
Amortization of Deferred Gain (1,122) (1,122)
Provision for Losses on Inventories 3,831 4,083
Credit for Deferred Income Taxes (22) (24)
Loss on Disposition of Equipment 156 455
Loss (Gain) on Foreign Currency Transactions 77 (321)
(Income) Loss From Unconsolidated Affiliates (69) 397
Changes in Operating Assets and Liabilities:
Increase in Trade Receivables (3,160) (4,645)
Increase in Inventories (247) (4,269)
(Increase) Decrease in Other Assets (726) 58
Increase in Accounts Payable and Other Liabilities 437 5,692
Increase in Deferred Revenue 492 942
________ ________
Net Cash Provided by Operating Activities 12,803 10,603
INVESTING ACTIVITIES:
Purchases of Land, Buildings and Equipment (8,106) (4,743)
Proceeds from Sale of Equipment 382 42
________ ________
Net Cash Used in Investing Activities (7,724) (4,701)
FINANCING ACTIVITIES:
Proceeds from Short-Term and Long-Term Borrowings 17,315 -
Payments of Short-Term and Long-Term Borrowings (18,024) (3,998)
Proceeds (Payments) for Capital Stock Activity 10 (269)
________ ________
Net Cash Used In Financing Activities (699) (4,267)
Effect of Exchange Rate Changes (592) (410)
________ ________
Increase in Cash and Cash Equivalents 3,788 1,225
Cash and Cash Equivalents at Beginning of Year 13,066 9,490
________ ________
Cash and Cash Equivalents at End of Nine Months $ 16,854 $ 10,715
<FN>
See Notes to Consolidated Financial Statements.
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BURR-BROWN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
the Company, 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. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
quarter ended October 1, 1994, are not necessarily indicative of the results
to be expected for the year ended December 31, 1994. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Company's Annual Report or Form 10-K for the year ended December 31,
1993, filed with the Securities and Exchange Commission.
2. INVENTORIES
Inventories consist of the following:
Oct 1, Dec 31,
1994 1993
________ ________
Raw Material $ 14,674 $ 14,578
Work-In-Process 14,182 18,047
Finished Goods 21,176 22,785
________ ________
50,032 55,410
Valuation Reserve (8,303) (11,374)
________ ________
$ 41,729 $ 44,036
3. COMMITMENTS AND CONTINGENCIES
The Company is a co-defendant in three ground water contamination claims that
are still in the early stages of the legal process. Based on investigations
to date, management does not believe the Company contributed to the alleged
contamination and, therefore, is of the opinion that the disposition of
these claims will not result in any material liability to the Company. Esti-
mated legal fees of $308 have been accrued as of October 1, 1994.
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BURR-BROWN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
(In thousands)
RESULTS OF OPERATIONS
Order bookings for the quarter were $56,267, up 14 percent from the preceding
quarter and up 34 percent from the corresponding quarter of 1993. Order book-
ings for the nine months ended October 1, 1994 were $153,570 compared to
$129,453 for the corresponding period of the previous year, an increase of 19
percent. Geographically, the increase from the second quarter occurred in all
regions.
Sales in the third quarter of 1994 were $49,217, up 3 percent from the second
quarter of 1994. However, compared to third quarter of 1993, sales were up 15
percent from $42,935. For the nine months ended October 1, 1994, sales
increased 13 percent from $144,179 compared to $127,701 for the corresponding
period of the previous year. It is estimated that approximately 3 percentage
points of this increase is due to favorable translation caused by the stronger
Japanese Yen.
The Company is making a substantial investment in a new order fulfillment
system that is expected to improve customer service and support much higher
sales levels.
The Company began selling through distributors in 1993 and this sales channel
continues to show steady growth. Sales to distributors accounted for approx-
imately 8 percent of revenues for 1994 compared to approximately 3 percent of
revenues for the first nine months of 1993. Provisions have been made to
reserve for the potential impact of the price protection and stock return
privileges of these distributors.
Third quarter gross profit of $21,177 declined 7 percent from $22,810 in the
second quarter of 1994. For the nine months ended October 1, 1994, gross
margin was 46 percent of sales while for the corresponding period of the
previous year the gross margin was 48 percent. This decline is primarily
attributable to a decrease in factory throughput in an effort to lower inven-
tories, although higher sales through distributors also exerted some downward
pressure on margins. As a result of the effort to trim inventories, net
inventories decreased nearly $3 million from the prior quarter end.
Operating expenses for the third quarter have remained relatively flat compared
to both the prior quarter and the third quarter of 1993 despite the revenue
growth. As a percentage of sales, they declined to 38 percent in the current
quarter from 43 percent in the year ago quarter. Year-to-date they increased 4
percent, or $2,438 from the nine months ended October 2, 1993. Although most
functional areas showed an uptrend in year-to-date expenses, the largest
increase has been in the Product Design area. This increase in Product Design
reflects the emphasis management has placed on developing new products and
enhancing existing products and processes.
Operating profit of $2,327 represents a 43 percent increase over the third
quarter of 1993. Operating profit of $9,460 for the nine months ended October
1, 1994 represents a 59 percent increase when compared with $5,959 for the
corresponding period of the preceding year. The operating profit improvement
was due to the strong revenue growth while maintaining fairly strict expense
controls.
The estimated annual effective tax rate for 1994 was 28 percent compared to 45
percent for 1993. This estimate was changed from the 32 percent recorded
during the first six months. This change in estimate had the effect of
increasing the current quarter's net income by $301 or earnings per common
share of $0.03. The lower tax rate was attributable to a shift in the mix of
earnings from higher tax jurisdictions to lower-taxed countries.
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Net income increased 182 percent to $1,704 from the third quarter of 1993. For
the nine month period ended October 1, 1994, net income was $5,405 compared to
$1,972 for the corresponding period of the previous year, an increase of 174
percent.
FINANCIAL CONDITION
For the nine months ended October 1, 1994, the Company generated a net cash
flow from operations of $12,803. Cash and cash equivalents increased $3,788
over December 31, 1993. In addition, compared to the corresponding period of
the previous year, cash flow from operations has increased $2,200.
Plant and equipment expenditures for the nine month period totaled $8,106
while planned capital investments for the entire year are anticipated to range
between $10,000 and $12,000. These capital investments will be financed by
cash from operations and, if needed, by borrowing under existing credit lines.
The Company's current ratio decreased to 2.07 at October 1, 1994 from 2.14 at
December 31, 1993. In addition to its term debt, the Company had approximately
$56,993 in credit facilities available with domestic and overseas banks at the
end of the third quarter, of which approximately $17,068 or 30 percent was
utilized. Management believes the Company has sufficient capital resources
available for the next 12 months.
The Company is named party in three toxic tort cases which allege ground water
contamination. After undertaking extensive hydrological investigations and
consultation with independent environmental experts, management believes that
the Company did not contribute to the alleged contamination and, therefore, is
of the opinion that the disposition of these claims will not result in any
material liability to the Company. The Company has accrued for the anticipated
legal expense. It should be noted, however, that the outcome of environmental
litigation is inherently unpredictable, and there can be no assurance as to the
ultimate disposition of these claims.
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ITEM 6. EXHIBITS
Exhibit 11
BURR-BROWN CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Earnings per share are computed using the weighted average number of shares
outstanding plus incremental shares issuable upon exercise of outstanding
options under the treasury stock method.
Three Months Ended Nine Months Ended
Oct 1, Oct 2, Oct 1, Oct 2,
1994 1993 1994 1993
__________ __________ __________ __________
<S> <C> <C> <C> <C>
INCOME:
Net Income $1,704,000 $ 604,000 $5,405,000 $1,972,000
PRIMARY EARNINGS PER SHARE:
Weighted Average Number
of Shares Outstanding 9,541,000 9,536,000 9,538,000 9,547,000
Net Effect of Dilutive Stock
Options Based on the
Treasury Stock Method Using
the Average Market Price of
Common Stock 140,000 20,000 113,000 57,000
__________ __________ __________ __________
Common Stock and Common Stock
Equivalents 9,681,000 9,556,000 9,651,000 9,604,000
Primary Earnings Per Share $ 0.18 $ 0.06 $ 0.56 $ 0.21
FULLY DILUTED EARNINGS
PER SHARE:
Weighted Average Number of
Shares Outstanding 9,541,000 9,536,000 9,538,000 9,547,000
Net Effect of Dilutive Stock
Options Based on the Treasury
Stock Method Using the End of
Period Market Price of Common
Stock, if Higher Than Average 188,000 21,000 150,000 69,000
__________ __________ __________ __________
Common Stock and Common
Stock Equivalents 9,729,000 9,557,000 9,688,000 9,616,000
Fully Diluted Earnings
Per Share $ 0.18 $ 0.06 $ 0.56 $ 0.21
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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.
BURR-BROWN CORPORATION
______________________
(Registrant)
November 11, 1994 JOHN L. CARTER
_________________ ______________________
(Date) John L. Carter
Executive Vice President
and Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<CASH> 16,854
<SECURITIES> 0
<RECEIVABLES> 40,513
<ALLOWANCES> 885
<INVENTORY> 41,729
<CURRENT-ASSETS> 103,309
<PP&E> 110,374
<DEPRECIATION> 67,414
<TOTAL-ASSETS> 151,211
<CURRENT-LIABILITIES> 49,848
<BONDS> 10,975
<COMMON> 97
0
0
<OTHER-SE> 86,460
<TOTAL-LIABILITY-AND-EQUITY> 151,211
<SALES> 144,179
<TOTAL-REVENUES> 144,179
<CGS> 77,318
<TOTAL-COSTS> 77,318
<OTHER-EXPENSES> 57,887
<LOSS-PROVISION> 42
<INTEREST-EXPENSE> 1,467
<INCOME-PRETAX> 7,507
<INCOME-TAX> 2,102
<INCOME-CONTINUING> 5,405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,405
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.56
</TABLE>
