SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended July 2, 1994
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 South Tucson Boulevard
Tucson, Arizona 85706
(Address of principle executive offices)
(603) 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 9,541,937 Shares
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BURR-BROWN CORPORATION AND SUBSIDIARIES
INDEX Page #
PART I. FINANCIAL CONDITION
Item 1 Financial Statements
Consolidated Statements of Financial Position,
July 2, 1994 and December 31, 1993 3
Consolidated Statements of Operations, three months and
six months ended July 2, 1994, and July 3, 1993 4
Consoldiated Statements of Cash Flows, six months ended
July 2, 1994 and July 3, 1993 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit 11: Computation of Consolidated Earnings
Per Share 10
(b) Reports on Form 8-K: Incorporated by reference
to Item 6 of the Registrant's 10-Q filing for
the period ended April 2, 1994.
SIGNATURES
Signature Page 11
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PART I. FINANCIAL INFORMATION
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Thousands of dollars)
<CAPTION>
JUL 2, DEC 31,
1994 1993
_________ _________
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 15,837 $ 13,066
Trade Receivables 38,124 34,822
Inventories 44,721 44,036
Deferred Income Taxes 1,143 1,011
Other Current Assets 2,667 2,091
_________ _________
Total Current Assets 102,492 95,026
Land, Buildings and Equipment
Land 3,390 3,378
Buildings and Improvements 21,636 20,818
Equipment 83,219 76,853
_________ _________
108,245 101,049
Less Accumulated Depreciation (65,221) (58,622)
_________ _________
43,024 42,427
Other Assets 4,936 4,609
_________ _________
$150,452 $142,062
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 18,952 $ 15,000
Accounts Payable 10,229 9,064
Accrued Expenses 8,940 9,610
Accrued Employee Compensation and Payroll Taxes 4,646 4,284
Income Taxes Payable 3,044 3,593
Current Portion of Long-Term Debt 4,995 2,923
_________ _________
Total Current Liabilities 50,806 44,474
Long-Term Debt 6,092 8,802
Deferred Gain 4,864 5,612
Deferred Income Taxes 1,198 1,194
Other Long-Term Liabilities 2,851 2,429
Commitments and Contingencies
Stockholders' Equity
Preferred Stock
Common Stock 97 97
Additional Paid-In Capital 26,082 26,013
Retained Earnings 52,422 49,605
Equity Adjustment From Foreign
Currency Translation 3,416 2,083
Current Earnings 3,701 2,817
Treasury Stock (1,077) (1,064)
_________ _________
84,641 79,551
_________ _________
$150,452 $142,062
<FN>
See Notes to Consolidated Financial Statements.
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BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUL 2, JUL 3, JUL 2, JUL 3,
1994 1993 1994 1993
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net Sales $ 47,607 $ 42,486 $ 94,962 $ 84,766
Cost of Sales 24,797 22,178 49,278 44,134
________ ________ ________ ________
Gross Margin 22,810 20,308 45,684 40,632
Expenses:
Sales and Marketing 9,628 9,251 18,959 18,259
Product Development 5,583 4,573 10,512 9,281
General and Administrative 3,830 4,318 9,080 8,755
________ ________ ________ ________
19,041 18,142 38,551 36,295
Income From Operations 3,769 2,166 7,133 4,337
Interest Expense (529) (624) (1,043) (1,238)
Other Income (Expense) (351) (94) (646) (611)
________ ________ ________ ________
Income Before Income Taxes 2,889 1,448 5,444 2,488
Provision for Income Taxes 925 652 1,743 1,120
________ ________ ________ ________
Net Income $ 1,964 $ 796 $ 3,701 $ 1,368
Earnings per Common Share $ 0.20 $ 0.08 $ 0.39 $ 0.14
Shares Used In Per Common
Share Calculation 9,624,000 9,601,000 9,570,000 9,621,000
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
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<TABLE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
SIX MONTHS ENDED
JUL 2, JUL 3,
1994 1993
________ ________
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 3,701 $ 1,368
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 5,040 5,000
Amortization of Deferred Gain (748) (748)
Provision for Losses on Inventories 2,712 3,234
Credit for Deferred Income Taxes (72) -
Loss on Disposition of Equipment 65 65
Gain on Foreign Currency Transactions (12) (134)
(Gain) Loss From Unconsolidated Affiliates (68) 364
Changes in Operating Assets and Liabilities:
Increase in Trade Receivables (1,125) (2,685)
Increase in Inventories (2,290) (1,234)
(Increase) Decrease in Other Assets (270) 317
Increase (Decrease) in Accounts Payable
and Other Liabilities (133) 2,657
________ ________
Net Cash Provided by Operating Activities 6,800 8,204
INVESTING ACTIVITIES:
Purchases of Land, Buildings and Equipment (5,391) (2,727)
Proceeds from Sale of Equipment 359 11
________ ________
Net Cash Used In Investing Activities (5,032) (2,716)
FINANCING ACTIVITIES:
Proceeds From Short-Term and Long-Term Borrowings 10,585 -
Payments of Short-Term and Long-Term Borrowings (9,412) (2,073)
Proceeds (Payments) for Capital Stock Activity 56 (186)
________ ________
Net Cash Provided By (Used In) Financing Activities 1,229 (2,259)
Effect of Exchange Rate Changes (226) (408)
________ ________
Increase in Cash and Cash Equivalents 2,771 2,821
Cash and Cash Equivalents at Beginning of Year 13,066 9,490
________ ________
Cash and Cash Equivalents at End of Six Months $15,837 $12,311
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
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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 July 2, 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:
JUL 2, DEC 31,
1994 1993
________ ________
Raw Material $ 16,466 $ 14,578
Work-In-Process 15,404 18,047
Finished Goods 25,551 23,285
________ ________
Valuation Reserve 57,421 55,910
(12,700) (11,874)
________ ________
$ 44,721 $ 44,036
3. LONG-TERM DEBT
The long-term debt of the Company is as follows:
JUL 2, DEC 31,
1994 1993
________ ________
Revolving line of credit $ 8,476 $ 0
Secured senior note due April 1996, with varying
principal and interest due quarterly 0 8,545
5.00%-6.05% notes denominated in yen--various
terms and maturities 1,318 1,729
Capitalized lease arrangements--various terms
and interest rates 875 974
Other 418 477
________ ________
11,087 11,725
Less current portion 4,995 2,923
________ ________
$ 6,092 $ 8,802
The secured senior note due April 1996 was paid down June 1994. Associated
with this early paydown was a fee of $450 that was expensed in the second
quarter of 1994.
The Company has borrowed under a revolving line of credit as of July 2, 1994
which was converted to the $8,500 term loan as of July 29, 1994.
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The Company has a syndicated credit facility consisting of a $15,000 revolving
line of credit and a $8,500 term loan. The Company may designate a term of
interest at LIBOR +2% of one, two, three or six months. In addition, the
Company may borrow with interest accruing at the bank's prime rate or a "bid
rate" under the revolving line of credit which expires July 1995. The term loan
which expires June 1996 requires quarterly principal and interest payments.
This syndicated facility is collateralized by certain accounts receivable and
inventories. A quarterly commitment fee of 1/2 percent per annum is assessed
on the unused portion of the revolving line of credit.
There are certain liquidity, debt, net worth, and debt coverage loan covenants
as well as certain capital spending restrictions under this facility. The
Company is in compliance with these covenants as of July 2, 1994. There are no
compensating balance requirements.
Under the various long-term debt agreements, the Company is obligated to pay
the following amounts for each of the next five years:
1994 . . . . . . . . . . . . . . . . . . . . . . . 2,483
1995 . . . . . . . . . . . . . . . . . . . . . . . 5,554
1996 . . . . . . . . . . . . . . . . . . . . . . . 2,959
1997 . . . . . . . . . . . . . . . . . . . . . . . 84
1998 . . . . . . . . . . . . . . . . . . . . . . . 7
4. COMMITMENTS AND CONTINGENCIES
The Company is involved 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.
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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 $49,210, up 2 percent from the preceding
first quarter and up 13 percent from the corresponding quarter of 1993. Geo-
graphically, the increase from the first quarter was slightly up in all
regions. Order bookings for the six months ended July 2, 1994 were $97,302
compared to $87,422 for the corresponding period of the previous year.
Sales in the second quarter of 1994 were $47,607, and remained relatively flat
compared to first quarter sales of $47,355. Compared to the second quarter of
1993 sales were up 12 percent from sales of $42,486. Sales of $94,962 for the
six months ended July 2, 1994 increased 12 percent when compared to $84,766 for
the corresponding period of the previous year.
Second quarter gross margin of $22,810 remained relatively steady from the
first quarter of 1994 and increased 12 percent when compared to the second
quarter of 1993. Gross margin at 48 percent of sales was the same as the
first six months of 1993 and the first quarter 1994. The Company has started
the task of decreasing inventory levels and as a result, gross margin may
decrease for the third quarter of 1994.
Operating expenses for the quarter have increased 5 percent, or $899, from the
second quarter of 1993. Expenses as a percentage of sales were 40 percent for
the second quarter of 1994 compared to 43 percent in the second quarter of
1993. For the six month period, they have increased 6 percent, or $2,256,
from the six months ended July 3, 1993. Expenses for the six month period
increased in all areas from 1993 levels with the largest increase in Product
Development. Management expects to continue the emphasis placed on Product
Development.
Operating profit of $3,769 represents a 74 percent increase over the second
quarter of 1993 while operating profit of $7,133 for the six months ended July
2, 1994, represents a 64 percent increase when compared with $4,337 for the
corresponding period of the preceding year.
The effective tax rate for the first six months of 1994 was 32 percent as com-
pared to 45 percent in the corresponding period of 1993. The decrease was
attributable to a shift in the mix of earnings among the different tax juris-
dictions in which the Company operates.
Net income of $1,964 increased 13 percent over the first quarter of 1994 and
147 percent over the second quarter of 1993. For the six month period ended
July 2, 1994, net income was $3,701 compared to $1,368 for the corresponding
period of the previous year, an increase of 171 percent. This improvement
in earnings is attributed principally to increased revenues and to a lesser
extent currency translation resulting from a strong Japanese Yen.
FINANCIAL CONDITION
During the first half of 1994, the Company generated a net cash flow of $6,800
from operations. Cash and cash equivalents increased $2,771 over December 31,
1993. However, the flow of cash from operations decreased $1,404 from the
second quarter of 1993.
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Expenditures for plant and equipment during the first half of 1994 totaled
$5,391 while planned capital investments for the entire year are anticipated to
be from $10,000 to $14,000. 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 2.02 at July 2, 1994, from 2.14 at
December 31, 1993. In addition to its term debt, the Company had approximately
$61,770 in credit facilities available with domestic and overseas banks at the
end of the second quarter, of which approximately $27,428 or 44 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. After undertaking
extensive hydrological investigations and consultation with independent
environmental consultants, management does not believe the Company contributed
to the alleged contamination and, therefore, is of the opinion that the dis-
position of these claims will not result in any material liability to the
Company. However, environmental litigation is inherently uncertain, and there
can be no assurance as to the ultimate outcome of these claims.
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ITEM 6. EXHIBITS
Exhibit 11
BURR-BROWN CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
(Unaudited)
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.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUL 2, JUL 3, JUL 2, JUL 3,
1994 1993 1994 1993
__________ __________ __________ __________
<S> <C> <C> <C> <C>
INCOME
Net Income $1,964,000 $ 796,000 $3,701,000 $1,368,000
PRIMARY EARNINGS PER SHARE
Weighted Average Number of
Shares Outstanding 9,541,000 9,546,000 9,538,000 9,551,000
Net Effect of Dilutive
Stock Options Based on the
Treasury Stock Method
Using the Average Market
Price of Common Stock 83,000 55,000 32,000 70,000
__________ __________ __________ __________
Common Stock and Common
Stock Equivalents 9,624,000 9,601,000 9,570,000 9,621,000
Primary Earnings per Share $0.20 $0.08 $0.39 $0.14
FULLY DILUTED EARNINGS
PER SHARE
Weighted Average Number of
Shares Outstanding 9,541,000 9,546,000 9,538,000 9,551,000
Net Effect of Dilutive Stock
Options Based on the Treas
-ury Stock Method Using
the End of Period Market
Price of Common Stock, If
Higher Than Average 83,000 48,000 37,000 61,000
__________ __________ __________ __________
Common Stock and Common
Stock Equivalents 9,624,000 9,594,000 9,575,000 9,612,000
Fully Diluted Earnings
per Share $0.20 $0.08 $0.39 $0.14
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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
August 10, 1994 SYRUS P. MADAVI
_______________ ______________________
Date Syrus P. Madavi
President and Chief
Financial Officer
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