<PAGE>
PROSPECTUS
1,750,000 SHARES
[LOGO]
COMMON STOCK
All of the 1,750,000 shares of Common Stock offered hereby are being sold by
Burr-Brown Corporation. The Company's Common Stock is quoted on the Nasdaq
National Market under the symbol BBRC. On September 21, 1995, the last reported
sale price for the Common Stock was $37.00 per share. See "Price Range of Common
Stock."
--------------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 5.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
Per Share.................................... $37.00 $1.85 $35.15
Total (3).................................... $64,750,000 $3,237,500 $61,512,500
<FN>
(1) See "Underwriting" for indemnification arrangements with the Underwriters.
(2) Before deducting expenses payable by the Company estimated at $250,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 262,500 additional shares of Common Stock solely to cover
over-allotments, if any. If all such shares are purchased, the total Price
to Public, Underwriting Discount and Proceeds to Company will be
$74,462,500, $3,723,125 and $70,739,375, respectively. See "Underwriting."
</TABLE>
--------------
The shares of Common Stock are offered by the Underwriters, subject to prior
sale, receipt and acceptance by them and subject to the right of the
Underwriters to reject any order in whole or in part and certain other
conditions. It is expected that the certificates for the shares will be
available for delivery on or about September 27, 1995 at the office of the agent
of Hambrecht & Quist LLC in New York, New York.
HAMBRECHT & QUIST COWEN & COMPANY
September 22, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
Regional Offices: Seven World Trade Center, 13th Floor, New York, New York
10048; and at Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549. The Common Stock of the Company
is quoted on the Nasdaq National Market. Reports and other information
concerning the Company may be inspected at the offices of the Nasdaq Stock
Market at 1735 K Street, N.W., Washington, D.C. 20006.
Additional information regarding the Company and the shares offered hereby
is contained in the Registration Statement on Form S-3 and the exhibits thereto
(the "Registration Statement") and the exhibits thereto filed with the
Commission under the Securities Act of 1933, as amended (the "Act"). Statements
made in this Prospectus as to the contents of any referenced contract, agreement
or other document are not necessarily complete, and each such statement shall be
deemed qualified in its entirety by reference thereto. Copies of the
Registration Statement and the exhibits thereto may be obtained, upon payment of
the fee prescribed by the Commission, or may be examined without charge, at the
office of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference except as superseded or modified
herein: (i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994; (ii) the Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended April 1, 1995 and July 1, 1995; (iii) the Company's Proxy
Statement for the Annual Meeting of Stockholders held on April 21, 1995; (iv)
the Company's Proxy Statement for the Special Meeting of Stockholders to be held
on September 15, 1995; (v) the description of the Company's Common Stock
contained in the Company's Registration Statement on Form 8-A filed with the
Commission on January 5, 1984; (vi) the description of the Company's share
purchase rights contained in the Company's Registration Statement on Form 8-A
filed with the Commission on August 1, 1989 and amended on March 6, 1990; (vii)
the Company's Report on Form 10-C filed with the Commission on May 19, 1995; and
(viii) all other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus and the
Registration Statement of which it is a part to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated herein modifies or replaces such statement. Any statement so
modified or superseded shall not be deemed, in its unmodified form, to
constitute a part of this Prospectus or such Registration Statement.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents which are incorporated herein by
reference (other than exhibits to such information, unless such exhibits are
specifically incorporated by reference into the information this Prospectus
incorporates). Requests should be directed to Burr-Brown Corporation, 6730 South
Tucson Boulevard, Tucson, Arizona 85706, Attention: Jill H. Rice, Corporate
Secretary.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET
MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE
"UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION, INCLUDING "RISK FACTORS," APPEARING ELSEWHERE IN THIS PROSPECTUS.
THE COMPANY
Burr-Brown is a leader in the design, development, manufacture and sale of
high performance analog and mixed signal integrated circuits. The Company's
products are used in a variety of electronic systems for communications,
computing, industrial process control, test and instrumentation, digital audio
and imaging. The Company offers over 1,000 high performance products that
perform signal processing functions such as the conditioning, amplification and
filtering of analog signals, and mixed signal functions such as
analog-to-digital and digital-to-analog conversion. Within its targeted markets,
Burr-Brown emphasizes high performance applications where its products are
critical elements of complex systems.
The Company sells its products to a diverse base of over 25,000 customers
worldwide, with key customers including Alcatel, AT&T, Allen-Bradley, Canon,
Conner Peripherals, General Electric, Hewlett-Packard, Hughes Network Systems,
Nokia, Northern Telecom, Siemens, Sony, Teradyne and Toshiba. The Company has
maintained long-term relationships with major customers in the industrial
process control, instrumentation and imaging markets, and typically serves as
the sole supplier of proprietary products. Recently, Burr-Brown has pursued a
strategy of leveraging its strengths in analog signal processing and mixed
signal design to develop a broad line of standard products for the faster
growing communications, computing and digital audio markets. As a result, the
Company has established key new customer relationships with leading companies in
the wireless and high speed communications industry. In addition, several of the
Company's products have also achieved significant market acceptance among
certain major suppliers in the personal computer industry.
Burr-Brown maintains major manufacturing and technical facilities in Tucson,
Arizona; Atsugi, Japan; and Livingston, Scotland. In 1994, Burr-Brown
established business units in these locations to bring greater focus on their
respective served markets and accelerate new product development. Analog and
mixed signal circuit design is highly dependent on the skills and experience of
individual design engineers, and Burr-Brown believes that its team of design
engineers has developed core strengths in high performance analog and mixed
signal integrated circuits. Since the beginning of 1994, the Company has
introduced over 90 new high performance products.
The Company sells and markets its products in major markets worldwide
through approximately 75 direct sales personnel, 40 manufacturers'
representatives and 20 distributors. The Company's direct sales force focuses
primarily on large corporate customers, while the Company's distributors service
the needs of the Company's broad base of smaller customers. In particular, the
direct sales force and field application engineers are focused on new design-ins
to enhance the Company's long-term revenue stream.
Burr-Brown satisfies the majority of its wafer processing requirements
(approximately 65% in 1994) through its own wafer fabrication facility in
Tucson. The Company is able to utilize a range of proprietary bipolar
manufacturing processes to optimize product performance, minimize manufacturing
cost and increase production flexibility. The Company also employs proprietary
deposition technology and computer-controlled laser trimming techniques to
produce circuits with the desired high precision. The Company augments its
internal manufacturing with wafer foundry and assembly services from third party
subcontractors.
The Company is also a majority shareholder in two subsidiaries, Intelligent
Instrumentation Inc., which provides portable data collection systems and
software and signal conditioning accessories, and Power Convertibles
Corporation, a supplier of DC-to-DC converter products, and battery chargers for
the cellular telephone market.
3
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company............. 1,750,000 shares
Common Stock to be outstanding after the
offering....................................... 16,173,696 shares(1)
Use of proceeds................................. Capital expenditures for expansion of
manufacturing capacity and general
corporate purposes, including working
capital
Nasdaq National Market symbol................... BBRC
</TABLE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, ---------------------
---------------------------------- JULY 2, JULY 1,
1992 1993 1994 1994 1995
---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales........................................... $ 162,949 $ 168,577 $ 194,196 $ 94,962 $ 129,141
Gross profit........................................ 76,392 81,602 87,954 45,684 61,984
Operating income.................................... 6,984 7,785 10,527 7,133 16,857
Net income.......................................... $ 998 $ 2,817 $ 6,465 $ 3,701 $ 11,502
Net income per share................................ $ 0.07 $ 0.20 $ 0.45 $ 0.26 $ 0.76
Shares used in per share calculation................ 14,390 14,376 14,498 14,355 15,071
</TABLE>
<TABLE>
<CAPTION>
AS OF JULY 1, 1995
--------------------------
ACTUAL AS ADJUSTED(2)
---------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital..................................................................... $ 54,539 $ 115,801
Net land, buildings and equipment................................................... 49,963 49,963
Long-term debt and capital lease obligations (less current portion)................. 1,895 1,895
Stockholders' equity................................................................ 101,548 162,810
Total assets........................................................................ 171,177 232,439
<FN>
- ------------------------
(1) Based on shares outstanding as of July 1, 1995 and the 1,750,000 shares to
be offered by the Company. Does not include options outstanding at July 1,
1995 to purchase 1,140,234 shares under the 1993 Stock Incentive Plan at a
weighted average exercise price of $6.31 per share. Also does not include
an additional 275,000 shares of Common Stock reserved for future option
grants under the Company's 1993 Stock Incentive Plan.
(2) Adjusted to give effect to the receipt of the net proceeds from the sale of
the 1,750,000 shares of Common Stock offered by the Company hereby after
deducting the underwriting discount and estimated offering expenses. See
"Use of Proceeds" and "Capitalization."
</TABLE>
--------------
EXCEPT AS SET FORTH IN THE FINANCIAL STATEMENTS INCORPORATED BY REFERENCE
HEREIN OR OTHERWISE NOTED HEREIN, ALL INFORMATION CONTAINED IN THIS PROSPECTUS
ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION, AND ALL SHARE
AND PER SHARE DATA HAVE BEEN ADJUSTED TO REFLECT THE THREE-FOR-TWO STOCK SPLIT
EFFECTED IN THE FORM OF A STOCK DIVIDEND ON MAY 19, 1995.
4
<PAGE>
RISK FACTORS
THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN ADDITION TO THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING THE COMMON
STOCK OFFERED HEREBY:
POTENTIAL FLUCTUATIONS IN OPERATING RESULTS. The Company's quarterly and
annual operating results are affected by a wide variety of factors that could
materially and adversely affect net sales, gross profit and profitability. These
factors include the volume and timing of orders received, changes in the mix of
products sold, market acceptance of the Company's and its customers' products,
competitive pricing pressures, fluctuations in foreign currency exchange rates,
the Company's ability to meet increasing demand, the Company's ability to
introduce new products on a timely basis, the timing of new product
introductions by the Company or its competitors, the timing and extent of
research and development expenses, fluctuations in manufacturing yields,
semiconductor industry cycles, the Company's access to advanced process
technologies, and the timing and extent of process development costs.
Historically, average selling prices in the semiconductor industry have
decreased over the life of particular products. If the Company is unable to
introduce new products with higher average selling prices or is unable to reduce
manufacturing costs to offset decreases in the prices of its existing products,
the Company's operating results will be adversely affected. In addition, the
Company is limited in its ability to reduce costs quickly in response to any
revenue shortfalls. As a result of the foregoing or other factors, there can be
no assurance that the Company will not experience material adverse fluctuations
in future operating results on a quarterly or annual basis. Although the
Company's profits have increased on an annual basis since 1991, there can be no
assurance that the Company will be able to maintain or increase its level of
profitability in future periods. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
DEPENDENCE ON NEW PRODUCTS. The Company's success depends upon its ability
to develop new analog and mixed signal products for existing and new markets, to
introduce such products in a timely manner and to have such products gain market
acceptance. The development of new products is highly complex, and from time to
time the Company has experienced delays in developing and introducing new
products. Successful product development and introduction depends on a number of
factors, including proper new product definition, timely completion of design
and testing of new products, achievement of acceptable manufacturing yields, and
market acceptance of the Company's and its customers' products. Moreover,
successful product design and development is dependent on the Company's ability
to attract, retain and motivate qualified analog design engineers, of which
there is a limited number. There can be no assurance that the Company will be
able to meet these challenges or adjust to changing market conditions as quickly
and cost-effectively as necessary to compete successfully. Due to the complexity
and variety of products manufactured by the Company, the limited number of
analog circuit designers and the limited effectiveness of computer-aided design
systems in the design of analog circuits, there can be no assurance that the
Company will be able to successfully develop and introduce new products on a
timely basis. Although the Company seeks to design products that have the
potential to become broadly accepted for high volume applications, there can be
no assurance that any products introduced by the Company will achieve such
market success. The Company's failure to develop and introduce new products
successfully could materially and adversely affect its business and operating
results. The Company has targeted new markets in which it has relatively little
experience, including the market niches for wireless applications for the
communications industry, power management applications for the computing
industry, and CD-ROM and PC sound applications for the digital audio industry.
There can be no assurance that the Company's products will adequately meet the
requirements of such new markets, or that the Company's products will achieve
market acceptance.
MANUFACTURING RISKS. The fabrication of integrated circuits is a highly
complex and precise process. Minute impurities, contaminants in the
manufacturing environment, difficulties in the fabrication process, defects in
the masks used to print circuits on a wafer, manufacturing equipment failures,
wafer breakage or other factors can cause a substantial percentage of wafers to
be rejected or numerous die on each wafer to be nonfunctional. In addition,
yields are impacted by defects caused during laser trimming, which is a
difficult process to manage. Manufacturing yields are also impacted by die
handling and assembly and test procedures. A large portion of the Company's
manufacturing costs are relatively fixed and, consequently, the number of
shippable die per wafer for a given product is critical to the Company's results
of operations. To the extent the
5
<PAGE>
Company does not achieve acceptable manufacturing yields or experiences product
shipment delays, its financial condition and results of operations would be
materially and adversely affected. As is typical in the semiconductor industry,
the Company has from time to time experienced lower than expected production
yields, which have delayed product shipments and adversely affected gross
margins. As the Company continues to increase its manufacturing output and its
use of third party foundries, there can be no assurance that the Company will
not experience a decrease in manufacturing yields. Moreover, there can be no
assurance that the Company will be able to maintain acceptable manufacturing
yields in the future.
To meet anticipated future demand and to utilize a broader range of
fabrication processes, the Company intends to increase its manufacturing
capacity. Failure to do so could result in a loss of customers, which could
materially and adversely affect the Company's financial condition or results of
operations. However, given the complexity and expense of designing and
constructing a significant expansion of a semiconductor fabrication plant,
during the construction of the additions the Company's manufacturing yields
could be materially and adversely impacted. Moreover, there can be no assurance
that the Company will be able to achieve the goals of the expansion, that the
expansion will be completed in a timely manner, or that, when completed, the
Company's expanded fabrication facility will be capable of producing wafers of a
comparable manufacturing yield and quality as those currently produced by the
Company.
The Company satisfies the majority of its wafer processing requirements
(approximately 65% in 1994) through its own wafer fabrication facility in
Tucson. Given the complex nature of the Company's products, it would be
difficult for the Company to arrange for independent manufacturing facilities to
supply all such products. Any prolonged inability to utilize the Company's
manufacturing facility as a result of fire, natural disaster or otherwise would
have a material adverse effect on the Company's financial condition and results
of operations. As has occurred from time to time in the past, during periods of
decreased demand, high fixed wafer fabrication costs can result in decreased
gross margins and thereby materially and adversely affect the Company's
financial condition or results of operations. Furthermore, the Company is
dependent on a number of foundries for certain of its manufacturing processes
not available internally. The failure of any of these foundries to perform these
processes on a timely basis could result in manufacturing delays, which could
materially and adversely affect the Company's results of operations.
RISKS OF INTERNATIONAL SALES. Sales to Japan, Europe and other
international markets in 1992, 1993, 1994 and the six-month period ended July 1,
1995 accounted for approximately 61%, 64%, 62% and 66%, respectively, of the
Company's net sales. The Company expects that international sales will continue
to represent a majority of net sales. The Company desires to continue to expand
its operations outside of the United States and to enter additional
international markets, which will require significant management attention and
financial resources and subject the Company further to the risks of operating
internationally. These risks include unexpected changes in regulatory
requirements, delays resulting from difficulty in obtaining export licenses for
certain technology, tariffs and other barriers and restrictions, and the burdens
of complying with a variety of foreign laws. The Company is also subject to
general geopolitical risks in connection with its international operations, such
as political and economic instability and changes in diplomatic and trade
relationships. The Company cannot predict whether quotas, duties, taxes or other
charges or restrictions will be imposed by the United States, Japan, Taiwan or
other countries upon the import or export of the Company's products in the
future, or what effect any such actions would have on its business, financial
condition or results of operations. In addition, because most of the Company's
international sales are denominated in foreign currencies, gains and losses on
the conversion to U.S. dollars of accounts receivable and accounts payable
arising from international operations may contribute to fluctuations in the
Company's operating results. In particular, the Company's recent operating
results have been favorably impacted by fluctuations in foreign currency
exchange rates. Although the Company typically enters into hedging transactions
when products are shipped in order to reduce exposure to currency rate
fluctuations, there can be no assurance that such hedging transactions will
reduce exposure to currency rate fluctuations or that fluctuations in currency
exchange rates in the future will not have an adverse impact on the Company's
results of operations. Furthermore, fluctuations in currency exchange rates may
negatively impact the Company's ability to compete in terms of price against
products denominated in local currencies. In addition, there can be no assurance
that regulatory, geopolitical and other factors will not adversely impact the
Company's operations in the future or require the Company to modify its current
business practices.
6
<PAGE>
COMPETITION. The semiconductor industry is intensely competitive and is
characterized by price erosion, declining gross margins, rapid technological
change, product obsolescence and heightened international competition in many
markets. The Company's competitors include Analog Devices, Inc., Linear
Technology Corp., Maxim Integrated Products Inc. and, in some segments, National
Semiconductor Corporation, Harris Corp., Motorola Inc., Texas Instruments Inc.,
Cirrus Logic Inc., Signal Processing Technologies, Sipex Corp., Unitrode Corp.,
Asahi Kasei Micro, Sony Electronics Inc., Hitachi America Ltd., Matsushita
Electric Corp. of America, Mitsubishi Corp. and Philips Semiconductors. Many of
these competitors have substantially greater financial, technical, marketing,
distribution and other resources, broader product lines and longer standing
relationships with customers than the Company. The Company's competitors also
include emerging companies attempting to sell products to specialized markets
such as those addressed by the Company. In the event of a downturn in the market
for analog circuits, companies that have broader product lines and longer
standing customer relationships may be in a stronger competitive position than
the Company. Competitors with greater financial resources or broader product
lines also may have more resources than the Company to engage in sustained price
reductions in the Company's primary markets to gain market share. As is typical
in the semiconductor industry, competitors of the Company have developed and
marketed products having similar or identical design and functionality as the
Company's products, and the Company expects that this will continue in the
future. To the extent the Company's products do not achieve performance, size or
other advantages over products offered by competitors, the Company is likely to
experience greater price competition with respect to such products.
The Company believes that its ability to compete successfully depends on a
number of factors both within and outside of its control, including price,
product quality, performance, success in developing and timing of introduction
of new products, adequate wafer fabrication capacity and sources of raw
materials, efficiency of production, timing of new product introductions by
competitors, protection of Company products by effective utilization of
intellectual property laws, and general market and economic conditions. There
can be no assurance that the Company will be able to compete successfully in the
future.
TECHNOLOGICAL CHANGE. The markets for the Company's products are
characterized by rapid technological change and frequent new product
introductions. To remain competitive, the Company must develop or obtain access
to new semiconductor design and process technologies to reduce die size,
increase die performance and functional complexity and improve manufacturing
yields. Semiconductor design and process methodologies are subject to rapid
technological change, requiring large expenditures for research and development.
If the Company is unable to develop or obtain access to advanced wafer
processing technologies as they become needed, or is unable to define, design,
develop and introduce competitive new products on a timely basis, its future
operating results will be materially and adversely affected. In addition, the
Company's ability to compete successfully depends on being able to use advanced
analog process technologies to manufacture its products. There can be no
assurance that the analog process technologies utilized by the Company will not
become obsolete.
SEMICONDUCTOR INDUSTRY. The semiconductor industry has historically been
cyclical and subject to significant economic downturns at various times, and has
been characterized from time to time by diminished product demand, accelerated
erosion of average selling prices and overcapacity. In addition, the end-markets
for systems that incorporate the Company's products are characterized by rapidly
changing technology and evolving industry standards. Although the semiconductor
industry in recent periods has experienced increased demand and production
capacity constraints, it is uncertain how long these conditions will continue.
The Company also may experience substantial period-to-period fluctuations in
future operating results due to general semiconductor industry conditions,
overall economic conditions or other factors. The Company, like other
semiconductor manufacturers with fabrication facilities, has high fixed costs
for its manufacturing facilities and believes that its operating results may be
adversely affected by an industry-wide downturn in the demand for
semiconductors. Such downturns may coincide with a recession in the U.S. economy
and slower growth in various electronics industries using semiconductors,
including market segments in which the Company is engaged at the time.
DEPENDENCE ON KEY EMPLOYEES; NEED TO HIRE AND RETAIN PERSONNEL. The
Company's future performance depends in significant part upon the continued
service of its key technical and senior management personnel. The loss of the
services of one or more of the Company's officers or other key employees could
have a material adverse effect on the Company's business, operating results and
financial condition. While many of the
7
<PAGE>
Company's current employees have many years of service with the Company, there
can be no assurance that the Company will be able to retain its existing
personnel. If the Company is unable to retain and hire additional personnel, the
Company's business and results of operations could be materially and adversely
affected. The future success of the Company is dependent, in part, on its
ability to attract, assimilate and retain additional, including certain key,
personnel. The Company will continue to need a substantial number of personnel,
including those with specialized skills, to commercialize its products and
expand all areas of its business in order to continue to grow. The Company
intends to hire a significant number of additional personnel in 1995 and beyond.
Competition for such personnel is intense, and there can be no assurance that
the Company will be able to attract, assimilate or retain additional highly
qualified personnel.
DEPENDENCE ON KEY SUPPLIERS. The Company has integrated circuit assembly
operations in Tucson and Scotland. In addition, much of the assembly demand is
met by using contract assembly companies located in the United States, Japan,
Taiwan, Malaysia, Korea and the Philippines. In the event that any of the
Company's contract assembly companies were to experience financial, operational,
production or quality assurance difficulties resulting in a reduction or
interruption in supply to the Company, the Company's operating results would be
adversely affected until alternate contract assembly companies, if any, became
available. The principal raw materials used by the Company in the manufacture of
its monolithic integrated circuits are silicon wafers, chemicals and gases used
in processing wafers, gold wire and ceramic, metal and epoxy packages that
enclose the chip and provide the external connections for the circuit. Silicon
wafers and other raw materials may be obtained from several suppliers. From time
to time, particularly during periods of increased industry-wide demand, silicon
wafers and other materials have been in short supply. A prolonged inability to
obtain silicon wafers or any other raw materials could have a material adverse
impact on the Company's business.
PATENTS AND INTELLECTUAL PROPERTY. The Company's success depends in part on
its ability to obtain patents and licenses and to preserve other intellectual
property rights covering its manufacturing processes, products and development
and testing tools. The Company seeks patent protection for those inventions and
technologies for which it believes such protection is suitable and is likely to
provide a competitive advantage to the Company. The Company currently holds 101
United States patents on semiconductor devices and methods with various
expiration dates, some as early as 1995. The Company has applications for 6
United States patents currently pending. The Company also holds 22 foreign
patents and has 33 foreign patent applications pending. The process of seeking
patent protection can be long and expensive and there can be no assurance that
its current patents or any new patents that may be issued will be of sufficient
scope or strength to provide any meaningful protection or any commercial
advantage to the Company. The Company may in the future be subject to or
initiate interference proceedings in the United States Patent and Trademark
office, which can demand significant financial and management resources.
The Company regards elements of its manufacturing process, product design
and equipment as proprietary and seeks to protect its proprietary rights through
a combination of employee and third party non-disclosure agreements, internal
procedures and patent protection. Notwithstanding the Company's attempts to
protect its proprietary rights, the Company believes that its future success
will depend primarily upon the technical expertise, creative skills and
management abilities of its officers and key employees rather than on patent and
copyright ownership. The Company also relies substantially on trade secrets and
proprietary technology to protect technology and manufacturing know-how, and
works actively to foster continuing technological innovation to maintain and
protect its competitive position. There can be no assurance that the Company's
competitors will not independently develop or patent substantially equivalent or
superior technologies.
The semiconductor industry is characterized by frequent litigation regarding
patent and other intellectual property rights. There can be no assurance that
any patent owned by the Company will not be invalidated, circumvented or
challenged, that the rights granted thereunder will provide competitive
advantages to the Company or that any of the Company's pending or future patent
applications will be issued with the scope of the claims sought by the Company,
if at all. In addition, effective copyright and trade secret protection may be
unavailable or limited in certain foreign countries. The Company is currently a
plaintiff in certain litigation regarding improper use of the Company's
proprietary information. A counter-claim has been filed against the Company in
connection with such litigation. In addition, the Company has been sued for
patent infringement by a competitor. While the claimed infringement relates to
products that account for an immaterial level of its net
8
<PAGE>
sales and the Company believes it has meritorious defenses to these claims and
the counter-claim, patent litigation is inherently uncertain and there can be no
assurance that these matters or future intellectual property litigation will not
have a material adverse impact on the Company's business.
As is typical in the semiconductor industry, the Company has from time to
time received, and may in the future receive, communications from third parties
asserting patents, maskwork rights, or copyrights on certain of the Company's
products and technologies. In the event a third party were to make a valid
intellectual property claim and a license was not available on commercially
reasonable terms, the Company's operating results could be materially and
adversely affected. Litigation, which could result in substantial cost to the
Company and diversion of its resources, may also be necessary to enforce patents
or other intellectual property rights of the Company or to defend the Company
against claimed infringement of the rights of others. The failure to obtain
necessary licenses or the occurrence of litigation relating to patent
infringement or other intellectual property matters could have a material
adverse effect on the Company's business and operating results. There can be no
assurance that the steps taken by the Company to protect its intellectual
property will be adequate to prevent misappropriation or that others will not
develop competitive technologies or products.
ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATIONS. Federal, state and local
regulations impose various controls on the storage, handling, discharge and
disposal of chemicals and gases used in the Company's manufacturing process and
on the facility leased by the Company. The Company believes that its activities
conform to present governmental regulations applicable to its operations and its
current facilities, including those related to environmental, land use, public
utility utilization and fire code matters. Increasing public attention has,
however, been focused on the environmental impact of semiconductor operations
and the risk to neighbors of chemical releases from such operations. There can
be no assurance that future governmental regulations will not impose the need
for additional capital equipment or other process requirements upon the Company
or restrict the Company's ability to expand its operations. The adoption of
future regulations or any failure by the Company to comply with applicable
existing environmental and land use regulations or to restrict the discharge of
hazardous substances could subject the Company to future liability and could
cause its manufacturing operations to be curtailed or suspended.
The Company is a named party in a toxic tort case filed in Pima County
Superior Court on January 13, 1992. The Company attempted informal negotiations
with the plaintiffs for dismissal that were ultimately unsuccessful. On
September 29, 1993, the Company then answered and denied liability for the
nuisance, trespass, negligence, strict liability, and other alleged torts. The
Company is named in three other toxic tort cases filed in U.S. District Court on
September 20, 1991, August 7, 1992, and January 9, 1995, respectively, which are
consolidations of individual lawsuits that sought damages for contaminating
ground water which was then pumped from public wells and consumed. Injuries are
alleged to have resulted from drinking the contaminated water and one suit is
asking for future medical monitoring. Third party complaints were filed by the
original defendant against five companies including Burr-Brown on September 30,
1993, March 7, 1994, and February 16, 1995. The complaints seek to have the
other five companies share in whatever damages are imposed. The original
defendant/third party claimant and the Company have filed joint motions for
dismissal of all claims against Burr-Brown without prejudice on the three cases
filed in U.S. District Court, and are awaiting approval of the court.
After undertaking extensive hydrological investigations and consultation
with independent environmental consultants, the Company believes it did not
contribute to the alleged contamination and, therefore, is of the opinion that
the disposition of the claims in the four toxic tort cases described above will
not result in any material change in the Company's financial condition, results
of operations or liquidity. However, environmental litigation is inherently
uncertain, and there can be no assurance as to the ultimate outcome of these
claims.
CONTROL BY OFFICERS, DIRECTORS AND AFFILIATED ENTITIES. Upon completion of
this offering, Thomas R. Brown, Jr. and the Company's other directors, executive
officers and entities affiliated with such directors as a group will
beneficially own approximately 32.9% and 2.5%, respectively, of the issued and
outstanding shares of the Company's Common Stock. Accordingly, such stockholders
will have sufficient voting power to control the outcome of matters (including
the election of directors and any merger, consolidation or sale of all or
substantially all of the Company's assets) submitted to the stockholders for
approval and may be deemed to have
9
<PAGE>
effective control over the affairs and management of the Company. This
controlling interest in the Company may also have the effect of making certain
transactions more difficult or impossible, absent the support of such
stockholders. Such transactions could include a proxy contest, mergers involving
the Company, tender offers and open market purchase programs involving Common
Stock that could give stockholders of the Company the opportunity to realize a
premium over the then prevailing market price for their shares of Common Stock.
STOCK PRICE VOLATILITY. The trading price of the Company's Common Stock may
be subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, announcements of technological innovations or new products by
the Company or its competitors, general conditions in the semiconductor and
electronic components industries, changes in earnings estimates or
recommendations by analysts, or other events or factors. In future quarters, if
the Company's financial performance falls below the performance predicted by
securities analysts, the Company's stock price could decline. In addition, the
public stock markets have experienced extreme price and trading volume
volatility in recent months. This volatility has significantly affected the
market prices of securities of many high technology companies for reasons
frequently unrelated to the operating performance of the specific companies.
These broad market fluctuations may adversely affect the market price of the
Company's Common Stock.
EFFECT OF ANTI-TAKEOVER PROVISIONS. The Company has taken a number of
actions that could have the effect of discouraging a takeover attempt that might
be beneficial to stockholders who wish to receive a premium for their shares
from a potential bidder. The Company has adopted a stockholder rights plan that
would cause substantial dilution to a person who attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The stockholder
rights plan may therefore have the effect of delaying or preventing any change
in control and deterring any prospective acquisition of the Company. In
addition, the Company's Certificate of Incorporation grants the Board of
Directors the authority to issue up to 2,000,000 shares of Preferred Stock and
to determine the price, rights, preferences and privileges of those shares
without any further vote or action by the Company's stockholders. The rights of
the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any shares of Preferred Stock that may be
issued in the future. While the Company has no present intention to issue shares
of Preferred Stock, such issuance, while providing desirable flexibility in
connection with possible acquisitions and other corporate purposes, could have
the effect of making it more difficult or less attractive for a third party to
acquire a majority of the outstanding voting stock of the Company. Such
Preferred Stock may also have other rights, including economic rights senior to
the Common Stock, and, as a result, the issuance thereof could have a material
adverse effect on the market value of the Common Stock. The Company's
Certificate of Incorporation also contains a "fair price" provision that
requires the approval of the holders of 90% of the Company's outstanding voting
shares as a condition to a merger or other "business combination" involving the
Company and any "related person," unless the transaction is either approved by
at least a two-thirds vote of disinterested directors or certain minimum price
and procedural requirements are met. Furthermore, the Company is subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibits the Company from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person first becomes an "interested stockholder,"
unless the business combination is approved in a prescribed manner. The
application of Section 203 also could have the effect of delaying or preventing
a change of control of the Company.
10
<PAGE>
THE COMPANY
Burr-Brown Corporation ("Burr-Brown" or the "Company") was incorporated in
Arizona in May 1956 as "Burr-Brown Research Corporation" and was reincorporated
in Delaware in January 1983 as "Burr-Brown Corporation." The Company's executive
offices are located at 6730 South Tucson Boulevard, Tucson, Arizona 85706, and
the Company's telephone number is (520) 746-1111.
The name "Burr-Brown" and the logo are registered trademarks of the Company
in the United States. "Intelligent Instrumentation Inc." and "Power Convertibles
Corporation" are registered trademarks of such corporations. Trademarks of
corporations other than the Company are also referred to in this Prospectus.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,750,000 shares of
Common Stock offered by the Company hereby are estimated to be $61,262,500
($70,489,375 if the Underwriters' over-allotment option is exercised in full).
The Company intends to use the net proceeds for capital expenditures for the
expansion of manufacturing capacity and general corporate purposes, including
working capital. The Company anticipates that its capital expenditures in 1995
and 1996 will aggregate approximately $80 million. Proceeds may also be used to
acquire companies, products or technologies that complement the Company's
business should such opportunities arise. No specific acquisitions are being
planned or negotiated as of the date of this Prospectus. Pending such uses, the
net proceeds will be temporarily invested in short-term obligations such as
certificates of deposit issued by banks, government obligations and money market
securities.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol BBRC. The following table sets forth for the periods indicated the high
and low closing sale prices of the Common Stock, as adjusted to reflect the
three-for-two stock split effected on May 19, 1995.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1993
1st Quarter........................................................................ $ 5.50 $ 3.83
2nd Quarter........................................................................ 5.25 4.33
3rd Quarter........................................................................ 6.50 4.42
4th Quarter........................................................................ 4.67 3.67
1994
1st Quarter........................................................................ 4.92 3.83
2nd Quarter........................................................................ 6.58 4.17
3rd Quarter........................................................................ 7.50 5.17
4th Quarter........................................................................ 10.33 6.58
1995
1st Quarter........................................................................ 12.08 6.67
2nd Quarter........................................................................ 27.50 11.00
3rd Quarter (through September 21, 1995)........................................... 40.75 24.75
</TABLE>
On September 21, 1995, the last reported sale price for the Common Stock on
the Nasdaq National Market was $37.00 per share. As of July 1, 1995, there were
approximately 3,640 holders of record of the Common Stock.
11
<PAGE>
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its Common Stock.
The Company currently intends to retain all cash for use in the operation and
expansion of its business and does not anticipate paying any cash dividends on
the Common Stock in the foreseeable future.
CAPITALIZATION
The following table sets forth on an unaudited basis the consolidated
capitalization of the Company as of July 1, 1995, and as adjusted to give effect
to the issuance and sale by the Company of the 1,750,000 shares of Common Stock
offered hereby and the application of the estimated net proceeds therefrom. The
financial data in the following table should be read in conjunction with the
Company's unaudited consolidated condensed quarterly financial statements (and
notes thereto) as of July 1, 1995, incorporated elsewhere herein by reference.
<TABLE>
<CAPTION>
AS OF JULY 1, 1995
-----------------------------------
ACTUAL AS ADJUSTED
---------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current portion........................................ $ 1,895 $ 1,895
Stockholders' equity (1)(2):
Preferred Stock, $.01 par value 2,000,000 shares authorized, none issued
and outstanding.......................................................... - -
Common Stock, $.01 par value 20,000,000 shares authorized, 14,423,696
shares issued and outstanding, 16,173,696 shares issued and outstanding
as adjusted.............................................................. 147 165
Additional paid-in capital................................................ 27,099 88,343
Retained earnings......................................................... 70,340 70,340
Accumulated translation adjustment........................................ 5,543 5,543
Treasury stock............................................................ (1,581) (1,581)
-------- --------
Total stockholders' equity.............................................. 101,548 162,810
-------- --------
Total capitalization.................................................. $ 103,443 $ 164,705
-------- --------
-------- --------
<FN>
- ------------------------
(1) Based on shares outstanding as of July 1, 1995 and the 1,750,000 shares to
be offered by the Company. Does not include options outstanding at July 1,
1995 to purchase 1,140,234 shares under the 1993 Stock Incentive Plan at a
weighted average exercise price of $6.31 per share. Also does not include
an additional 275,000 shares of Common Stock reserved for future option
grants under the Company's 1993 Stock Incentive Plan.
(2) Does not give effect to the proposed amendment to the Company's Restated
Certificate of Incorporation to increase the authorized shares of Common
Stock from 20,000,000 to 40,000,000.
</TABLE>
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below as of December 31,
1993 and 1994 and for each of the years in the three year period ended December
31, 1994 have been derived from the Company's consolidated financial statements
which have been audited by Ernst & Young LLP, independent auditors, which
financial statements are incorporated by reference herein. The selected
consolidated balance sheet data as of December 31, 1992 have been derived from
audited consolidated financial statements of the Company which are not
incorporated by reference herein. The selected consolidated financial data
presented below as of July 1, 1995, and for the six month periods ended July 2,
1994 and July 1, 1995 have been derived from unaudited consolidated financial
statements of the Company which financial statements are also incorporated by
reference herein. In the opinion of the Company's management, such unaudited
consolidated financial data include all adjustments, consisting of only normal
recurring adjustments, necessary to fairly state the information set forth
therein. The following consolidated financial data should be read in conjunction
with the consolidated financial statements, related notes and other financial
information incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, ------------------------
--------------------------------------- JULY 2, JULY 1,
1992 1993 1994 1994 1995
------------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................. $ 162,949 $ 168,577 $ 194,196 $ 94,962 $ 129,141
Cost of sales............................. 86,557 86,975 106,242 49,278 67,157
------------- ----------- ----------- ----------- -----------
Gross profit............................ 76,392 81,602 87,954 45,684 61,984
Operating expenses:
Product development..................... 18,136 19,752 21,851 10,512 12,749
Selling, general and administrative..... 51,272 54,065 55,576 28,039 32,378
------------- ----------- ----------- ----------- -----------
Total operating expenses.............. 69,408 73,817 77,427 38,551 45,127
------------- ----------- ----------- ----------- -----------
Operating income.......................... 6,984 7,785 10,527 7,133 16,857
Other expense:
Interest expense........................ (3,825) (2,338) (1,725) (1,043) (598)
Other, net.............................. (1,439) (900) (511) (646) (502)
------------- ----------- ----------- ----------- -----------
Other expense........................... (5,264) (3,238) (2,236) (1,689) (1,100)
------------- ----------- ----------- ----------- -----------
Income before taxes....................... 1,720 4,547 8,291 5,444 15,757
Provision for income taxes................ 722 1,730 1,826 1,743 4,255
------------- ----------- ----------- ----------- -----------
Net income................................ $ 998 $ 2,817 $ 6,465 $ 3,701 $ 11,502
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
Net income per share (1).................. $ 0.07 $ 0.20 $ 0.45 $ 0.26 $ 0.76
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
Shares used in per share
calculation (1).......................... 14,390 14,376 14,498 14,355 15,071
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
<CAPTION>
AS OF DECEMBER 31, AS OF
--------------------------------------- JULY 1,
1992 1993 1994 1995
------------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........................... $ 47,705 $ 49,456 $ 45,623 $ 54,539
Net land, buildings and equipment......... 45,665 42,427 45,896 49,963
Long-term debt and capital lease
obligations (less current portion)....... 11,718 8,802 1,839 1,895
Stockholders' equity...................... 77,443 79,551 87,622 101,548
Total assets.............................. $ 136,407 $ 142,062 $ 143,008 $ 171,177
<FN>
- ------------------------
(1) Adjusted to reflect the three-for-two stock split effected on May 19, 1995.
</TABLE>
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations in the Company's Annual Report on Form 10-K
incorporated herein by reference for a discussion covering a comparison of the
Company's 1992, 1993 and 1994 results of operations. Reference is made to
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Company's Quarterly Report on Form 10-Q for the quarter ended
July 1, 1995 incorporated herein by reference for a discussion covering a
comparison of the Company's results of operations for the six-month periods
ended July 2, 1994 and July 1, 1995. See "Incorporation of Certain Documents by
Reference."
QUARTERLY RESULTS OF OPERATIONS
The following tables present unaudited quarterly financial information for
the four quarters of 1994 and the first two quarters of 1995. All share and per
share data have been adjusted to reflect the three-for-two stock split effected
on May 19, 1995. In the opinion of the Company's management, this unaudited
information has been prepared on the same basis as the audited financial
statements incorporated herein by reference and includes all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the information set forth therein. The operating results for any quarter are not
necessarily indicative of results for any future period. The Company anticipates
that results will fluctuate on a quarterly basis depending on a number of
factors. See "Risk Factors--Potential Fluctuations in Operating Results."
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
APRIL 2, JULY 2, OCT. 1, DEC. 31, APRIL 1, JULY 1,
1994 1994 1994 1994 1995 1995
--------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales..................................... $ 47,355 $ 47,607 $ 49,217 $ 50,017 $ 59,547 $ 69,594
Cost of sales................................. 24,481 24,797 28,040 28,924 31,361 35,796
--------- --------- --------- --------- --------- ---------
Gross profit................................ 22,874 22,810 21,177 21,093 28,186 33,798
Operating expenses:
Product development......................... 4,929 5,583 5,386 5,953 5,828 6,921
Selling, general and administrative......... 14,581 13,458 13,464 14,073 15,567 16,811
--------- --------- --------- --------- --------- ---------
Total operating expenses.................. 19,510 19,041 18,850 20,026 21,395 23,732
--------- --------- --------- --------- --------- ---------
Operating income.............................. 3,364 3,769 2,327 1,067 6,791 10,066
Other expense................................. (809) (880) (264) (283) (411) (689)
--------- --------- --------- --------- --------- ---------
Income before taxes........................... 2,555 2,889 2,063 784 6,380 9,377
Provision for income taxes.................... 818 925 359 (276) 1,723 2,532
--------- --------- --------- --------- --------- ---------
Net income.................................... $ 1,737 $ 1,964 $ 1,704 $ 1,060 $ 4,657 $ 6,845
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Net income per share.......................... $ 0.12 $ 0.14 $ 0.12 $ 0.07 $ 0.31 $ 0.45
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Shares used in per share calculation.......... 14,303 14,436 14,522 14,775 14,805 15,212
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
14
<PAGE>
The following table sets forth for the period indicated certain financial
data as a percentage of net sales and year-over-year sales growth:
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------
APRIL 2, JULY 2, OCT. 1, DEC. 31, APRIL 1, JULY 1,
1994 1994 1994 1994 1995 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales........................................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross margin........................................ 48.3 47.9 43.0 42.2 47.3 48.6
Operating expenses:
Product development............................... 10.4 11.7 10.9 11.9 9.8 9.9
Selling, general and administrative............... 30.8 28.3 27.4 28.1 26.1 24.2
Total operating expenses........................ 41.2 40.0 38.3 40.0 35.9 34.1
Operating income.................................... 7.1 7.9 4.7 2.1 11.4 14.5
Net income.......................................... 3.7% 4.1% 3.5% 2.1% 7.8% 9.8%
Year-over-year sales growth......................... 12.0% 12.1% 14.6% 22.4% 25.7% 46.2%
</TABLE>
NET SALES. Net sales increased over the past six quarters from $47.4
million in the first quarter of 1994 to $69.6 million in the second quarter of
1995. This increase, which primarily occurred in the first two quarters of 1995,
reflects continued sales of the Company's products into the test and
instrumentation market and the industrial and process control market, and
increased sales into the higher growth communications, computing and digital
audio markets. In addition, sales of the Company's products in Japan and Europe
increased as a percentage of total sales over these periods. The increase in the
Company's net sales also reflects the performance of the overall semiconductor
industry, a favorable pricing environment for the Company's products, and the
favorable impact of changes in foreign currency exchange rates, particularly for
the Japanese yen and the German mark. Although unit volumes generally increased
throughout the four quarters of 1994, average selling prices declined over the
period, primarily due to changes in product mix, contributing to the relatively
slow sequential growth in 1994. Sales growth accelerated in the first half of
1995 due to accelerated unit volumes and modestly increased average selling
prices.
GROSS PROFIT. The Company's gross margins decreased from 48.3% in the first
quarter of 1994 to 42.2% in the fourth quarter of 1994. Gross margins
subsequently increased to 47.3% and 48.6% in the first and second quarters of
1995, respectively. The decreased gross margins in the second half of 1994
reflect, in part, the Company's efforts to manage its inventory levels while
continuing to increase its net sales. These inventory management efforts reduced
assembly and test manufacture cycle times, which caused an overall reduction in
work in process and finished goods inventories. The combined effect of these
inventory management practices allowed the Company to increase net sales over
the remainder of 1994 while decreasing manufacturing volumes during this period.
As a result, the Company's fixed manufacturing costs were allocated against a
relatively smaller amount of manufactured goods in the third and fourth quarters
of 1994, resulting in lower gross margins during those periods. The Company's
gross margins have returned to the levels of the first half of 1994 as
manufacturing volumes have increased to meet increasing net sales.
PRODUCT DEVELOPMENT. Product development expenses increased from $4.9
million to $6.9 million over the past six quarters while fluctuating between
approximately 10% and 12% of net sales over the period. The Company's long-term
strategy is to increase this spending level, both in absolute dollars and as a
percentage of net sales. During the first half of 1995, the Company established
a separate technology development department focused on process development in
order to assist in this critical area.
15
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expense remained relatively constant between $13.5 million and $14.6 million in
1994, while increasing to $15.6 million and $16.8 million in the first and
second quarters of 1995, respectively. As a percentage of net sales, these
expense items have generally decreased from 30.8% in the first quarter of 1994
to 24.2% in the second quarter of 1995, largely reflecting the increase in net
sales. Part of the percentage decrease in the first half of 1995 reflects a
consolidation of marketing resources in Europe and an overall increase in the
percentage of sales made through independent distributors rather than direct
sales.
NET INCOME. Net income has ranged between 2.1% and 9.8% of net sales over
the past six quarters, generally reflecting the combined effect of the
above-described variables. The tax rates over this period have been favorably
impacted by the expected utilization of net operating loss and tax credit
carryforwards as well as a greater increase in United States profits than the
increase in profits from foreign operations, which have higher income tax rates
than the United States.
16
<PAGE>
BUSINESS
Burr-Brown is a leader in the design, development, manufacture and sale of
high performance analog and mixed signal integrated circuits. The Company's
products are used in a variety of electronic systems for communications,
computing, industrial process control, test and instrumentation, digital audio
and imaging. The Company offers over 1,000 high performance products that
perform signal processing functions such as the conditioning, amplification and
filtering of analog signals, and mixed signal functions such as
analog-to-digital and digital-to-analog conversion. Within its targeted markets,
Burr-Brown emphasizes high performance applications where its products are
critical elements of complex systems.
INDUSTRY BACKGROUND
Integrated circuits may be divided into three categories--analog, digital
and mixed signal. Digital circuits, which include memory devices and
microprocessors, use many repetitive circuit elements that can each represent
the two values ("1" and "0") required by the binary number system that serves as
a basis for most computation. Analog circuits, on the other hand, are capable of
representing infinite numbers of values, with an output signal based on a
continuously varying input signal. These input signals typically represent "real
world" phenomena such as temperature, pressure, position, frequency, sound and
speed. Mixed signal circuits are circuits that employ both analog and digital
signal processing techniques. Analog and mixed signal circuits are used in most
electronic systems, with major markets for such circuits including computing,
telecommunications and data communications, test and measurement, medical
instrumentation, industrial process control, manufacturing automation, digital
audio and automotive electronics. Typical analog circuits include signal
amplifiers, instrumentation amplifiers, current transmitters, regulators, analog
multipliers and isolation amplifiers. Typical mixed signal circuits include
analog-to-digital and digital-to-analog converters. Recently, the rapid growth
of the high speed and wireless communications, multimedia and portable
computing, and digital audio markets have created important new growth
opportunities for high performance analog and mixed signal products. Industry
sources estimate that analog and mixed signal circuits will account for 14% of
the projected $125 billion market for semiconductors in 1995.
The market for, and design and production of, analog circuits differ from
the market for, and design and production of, digital circuits in several
important ways. In general, the market for analog circuits is more diverse than
for digital circuits, with each application requiring different operating
specifications for resolution, processing linearity, speed, power and amplitude
capability. As a result, analog circuits generally have relatively smaller
volume requirements per device. The markets for analog circuits are generally
fragmented, and competition within those markets tends to depend less upon price
and more upon performance, functionality, quality and reliability. Analog
circuits designed for specific applications are often characterized by longer
life cycles and more stable pricing compared to typical digital circuits.
Computer-aided design and engineering tools, which have proliferated and
enhanced the design effort for digital integrated circuits, are less effective
for analog devices. Accordingly, analog circuit design has traditionally been
highly dependent on the skills and experience of individual design engineers.
Also, in contrast to digital circuits, the performance of analog circuits is
more dependent on circuit design, circuit layout and the matching of circuit
elements than on advanced capabilities in submicron manufacturing processes.
Consequently, the production of high performance analog circuits typically
requires less capital investment than the production of highly integrated
digital circuits. Because analog circuits are found in most electronic systems,
the growth in the use of digital systems across a broad range of applications
has in turn fueled a growth in the demand for analog integrated circuits.
STRATEGY
Burr-Brown is currently well positioned as a leading supplier of precision
high performance analog and mixed signal integrated circuits to the
communications, computing, industrial process control, test and instrumentation,
digital audio and imaging markets. The Company maintains a strong presence in
the industrial process control, and test and instrumentation markets, where it
has long established relationships with a broad, diverse customer base.
Burr-Brown also serves the communications, computing, digital audio and imaging
markets by offering high performance standard products that can be used as
precision building blocks across many applications. The Company believes it can
further strengthen its presence in these markets by providing
17
<PAGE>
application specific standard products (ASSPs) that are developed to address the
unique requirements of fast growing emerging applications. Beginning in 1994,
Burr-Brown's new management team developed a plan to enhance the Company's
growth and profitability by employing the following strategies:
STRENGTHEN LEADERSHIP IN THE COMPANY'S TRADITIONAL MARKETS. Burr-Brown is a
leading supplier of precision high performance analog and mixed signal
integrated circuits to a variety of markets, including the industrial process
control, and test and instrumentation markets, and offers over 1,000 high
performance products to a diverse base of over 25,000 customers worldwide. In
these markets, the Company has maintained long-term relationships with major
customers and typically serves as the sole supplier of proprietary products. The
Company intends to enhance its leadership position and expand its market share
in the design, manufacture and marketing of these products by offering optimized
standard products along with targeted high volume application-specific standard
products. The Company believes that its established reputation and strong
customer relationships will continue to facilitate entry into key new
applications which include smart sensors and AC motor control.
TARGET HIGH GROWTH MARKETS. The Company is expanding its presence in
certain high growth segments of the communications, computing, digital audio and
imaging markets in which it can capitalize on its expertise in designing and
manufacturing precision analog and mixed signal integrated circuits. The Company
seeks to increase its presence in these markets by leveraging its existing core
competencies and understanding of customer needs into key market niches such as
wireless basestations and High bit-rate Digital Subscriber Line ("HDSL") for the
communications market; and power management, CD-ROM, PC-sound and imaging
applications for the computing market. Within its targeted markets, Burr-Brown
emphasizes high performance applications where its products are critical
elements of complex systems.
ACCELERATE NEW PRODUCT DEVELOPMENT. To capitalize on the growth
opportunities in its targeted markets, the Company seeks to expand its product
offerings while reducing the time required to bring new products to market.
Since the beginning of 1994, the Company has introduced over 90 new high
performance products, including a family of low power, high resolution
analog-to-digital converters for a broad range of applications; a group of high
speed operational amplifiers delivering low noise and low distortion necessary
for applications in video signal processing and high speed communications; a
portfolio of high precision instrumentation amplifiers that offer leading edge
performance for applications in process control, and test and measurement; and
several PCM digital-to-analog converters well-suited for multimedia, CD-ROMs,
cable TV set-top boxes, video phones and other high performance digital audio
applications.
LEVERAGE WORLDWIDE SALES AND DISTRIBUTION NETWORK. The Company sells its
products in major markets worldwide through an approximately 75 person direct
sales force, 40 manufacturers' representatives and 20 distributors. The Company
has recently reorganized its worldwide sales and distribution network by
focusing its direct sales force on large corporate customers while directing its
distributors to service the Company's broad base of smaller customers. The
Company believes this organizational realignment will increase the efficiency of
its selling efforts. In particular, the direct sales force and field application
engineers are focused on new design-ins to enhance the Company's long-term
revenue stream.
IMPROVE COST CONTROLS. The Company is implementing an organization-wide
cost reduction program to increase product margins and profitability. The
Company seeks to improve manufacturing yields, reduce cycle times and increase
direct labor productivity, thereby increasing manufacturing output and gaining
additional operating leverage from fixed manufacturing costs. The Company is
making significant investments in more advanced wafer fabrication and test
equipment to support these efforts. Additionally, the Company is migrating
labor-intensive assembly and test operations from higher cost domestic and
Japanese facilities to more cost-effective Southeast Asian locations. Expense
growth is being constrained within the sales, marketing, and general and
administrative areas to improve operating margins as sales increase. As part of
this initiative, the Company is working to improve its infrastructure by
investing in a fully integrated management information system that will tie
together sales and distribution, finance and materials management, production
planning, and shop floor control functions. The Company believes that, once
completely implemented, the system will facilitate further cost reductions and
create improved organizational efficiencies.
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<PAGE>
EMPLOY INTERNAL AND EXTERNAL MANUFACTURING. The Company believes that
employing both internal and external manufacturing capacity improves quality,
cost-effectiveness, responsiveness to customers, access to capacity, ability to
implement leading edge process technology and time to market. The Company
satisfies the majority of its wafer processing requirements (approximately 65%
in 1994) through its own wafer fabrication facility in Tucson, Arizona and
augments internal manufacturing capacity with the foundry services of third
party wafer subcontractors for processes not available internally. These third
party processes include CMOS, BiCMOS and other bipolar processes. Because the
semiconductor industry is currently facing capacity constraints in wafer
manufacturing and the availability of third party foundries has diminished
significantly, the Company plans to expand significantly and upgrade its Tucson
wafer fabrication facility while simultaneously continuing to use third party
foundries for the manufacture of certain products.
There can be no assurance that the Company's strategies, even if
successfully implemented, will reduce the risks associated with the Company's
business. See "Risk Factors."
PRODUCTS AND CUSTOMERS
The Company offers over 1,000 high performance products to a diverse base of
over 25,000 customers worldwide. The Company's products are primarily
manufactured by four core component divisions, the Linear Products Division, the
Data Conversion Products Division, the Digital Audio Products Division, and the
Isolation Products Division. These operations accounted for more than 80% of the
Company's net sales in 1994. In addition to the Company's core component
business, Burr-Brown also owns a majority interest in each of two
subsidiaries--approximately 90% of Intelligent Instrumentation Inc. ("III") and
approximately 80% of Power Convertibles Corporation ("PCC").
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<PAGE>
COMPONENTS
The following table illustrates certain representative Burr-Brown products,
their applications and representative customers in each of the principal markets
addressed by the Company.
<TABLE>
<CAPTION>
CUSTOMER SELECTED PRODUCTS CUSTOMER APPLICATIONS
<S> <C> <C>
COMMUNICATIONS
Alcatel Instrumentation & ISO Amplifiers Central Office Switches
AT&T High Speed Amplifiers, A/D Various Telecommunications
Converters Applications
Hughes Network Systems High Speed Operational Cellular Basestations
Amplifiers, A/D &
D/A Converters
Nokia High Speed Operational Cellular Basestations
Amplifiers
Northern Telecom/BNR High Speed Amplifiers, A/D Cellular Basestations
Converters
PairGain Technologies Linear Interface Circuits HDSL
INDUSTRIAL PROCESS
CONTROL
ABB Amplifiers, A/D & D/A Converters Industrial Control
Allen Bradley Amplifiers, A/D & D/A Converters Program Logic Controls
Elsag Bailey Isolation Amplifiers Process Control Systems
General Electric Amplifiers, A/D & D/A Converters Robotic/Motor Control
Siemens Amplifiers, A/D & D/A Converters Motor Control/Industrial Control
TEST AND
INSTRUMENTATION
Advantest Amplifiers, A/D & D/A Converters Semiconductor Test Equipment
Hewlett-Packard Amplifiers, A/D & D/A Converters Test Equipment
National Instruments Amplifiers, A/D & D/A Converters Data Acquisition Systems
Teradyne Amplifiers, A/D & D/A Converters Semiconductor Test Equipment
DIGITAL AUDIO
Alpine PCM Converters Automotive Stereos
Pioneer PCM Converters CD Players
Sony PCM Converters Portable Stereos
Yamaha PCM Converters Electronic Keyboards
COMPUTING
Conner Peripherals Regulators Hard Disk Drives
Fujitsu Regulators Hard Disk Drives
Hewlett-Packard Regulators Disk Drives
NEC PCM Converters CD-ROM Drives
IMAGING
Canon Amplifiers Copiers
Siemens Amplifiers & Analog Circuit CAT Scanners
Functions
Toshiba Analog Circuit Function & A/D CAT Scanners
Converters
</TABLE>
LINEAR PRODUCTS DIVISION
The Company's analog circuits include operational amplifiers, power
amplifiers, instrumentation amplifiers, programmable gain amplifiers, isolation
amplifiers, current transmitters and other analog signal processing components.
Analog signal processing integrated circuits are used to process and transmit
analog information prior to their conversion to digital signals. These
components are used in communications equipment, automatic test equipment,
analytical instruments, medical instruments and systems, military equipment,
industrial controls, personal computing devices and computer peripherals.
20
<PAGE>
OPERATIONAL AMPLIFIERS. Operational amplifiers are used to detect and
amplify weak (low level) analog signals and are included in many measurement
and control systems. The operational amplifier is the fundamental building
block in analog systems design. In addition to amplification, it can perform
mathematical functions such as integration and differentiation. The
Company's high performance operational amplifiers are generally capable of
amplifying typical analog signals in the micro-volt range up to 100,000
times and provide ultra-low drift, low bias current, low noise, high
bandwidth and fast settling time. Certain models provide high voltage and
high current operation for special applications. These high performance
amplifiers are required to treat signals generated in numerous applications,
including scramblers for satellite communications systems, robotic vision
systems and magnetic resonance and computer-aided tomography (CAT) body
scanning systems.
OTHER AMPLIFIERS. The Company manufactures a number of other
amplifiers, including instrumentation amplifiers and programmable gain
amplifiers. These products perform a variety of functions related to the
amplification of analog signals. Among other uses, these components permit
the measurement of weak signals in the presence of unwanted "noise" and
protect sensitive instruments from the effects of transient high-magnitude,
potentially damaging voltages caused by sources such as lightning or
switching of high voltage equipment. These amplifiers are used in many
diverse applications ranging from temperature measurement in industrial
processes to the protection of sensitive medical instruments, and to isolate
electrical power line disturbances and faults.
OTHER SIGNAL PROCESSING AND TRANSMITTER COMPONENTS. The Company
manufactures a variety of other analog signal processing components
including mathematical function circuits, current transmitters and
voltage-to-frequency converters. Mathematical function circuits are used
when information sought can be effectively derived only through its
mathematical relationship to analog signals. Current transmitters send
analog signal information from a process sensor to measurement or control
equipment in the form of a current on the same wires that produce the power
to the transmitter and sensor. Voltage-to-frequency converters convert
process signals to a frequency, making the signal immune to electrical noise
and permitting more efficient storage and processing of the information.
DATA CONVERSION PRODUCTS DIVISION
The Company's Data Conversion Products Division focuses on the design,
manufacturing and marketing of integrated circuit devices used to convert analog
signals to digital form ("A/D converters") or to convert digital signals to
analog form ("D/A converters"). This conversion is necessary in virtually all
applications in which digital computers or processors measure and control the
analog signals from a physical, "real world" process.
GENERAL PURPOSE CONVERSION PRODUCTS. The majority of the Company's
mixed signal components revenue is derived from moderate speed, high
resolution and high accuracy converters. These general purpose converters
are used primarily in manufacturing process control instrumentation,
electronic test instrumentation, automatic test systems and communications
systems. For example, in a robot controller, the position of the robot arm
must be precisely measured and manipulated. Analog signals from the robot's
position sensors are converted by an A/D converter for computer processing
and, in turn, a D/A converter converts the digital control signal from the
computer to analog form to drive the actuators and servo motors to position
the robot arm accurately.
HIGH SPEED CONVERSION PRODUCTS. In the early 1980's, the Company began
developing high speed, high resolution A/D and D/A converters at speeds
substantially greater than general purpose products. These products utilize
a unique combination of technologies and design expertise to achieve
state-of-the-art performance. High speed converters are used in a variety of
applications such as image processing, digital oscilloscopes, ultrasound,
radar and sonar, as well as the front end of advanced systems using digital
signal processing (DSP) technology. The Company believes that due to the
unique combination of technologies involved, the high speed, high resolution
data converter products have limited competition.
DIGITAL AUDIO PRODUCTS DIVISION (BURR-BROWN JAPAN)
The Company's Digital Audio Products Division, which is operated by the
Company's wholly-owned Japanese subsidiary, focuses on the design, manufacturing
and marketing of high precision, single chip digital-
21
<PAGE>
to-analog converters and analog-to-digital for the digital audio market. The
Company believes that Burr-Brown was the first company to introduce such a
product into this marketplace and is currently one of the largest merchant
market suppliers of such devices worldwide. This product, a pulse-code-modulated
("PCM") conversion device, plays an essential role in digital audio systems,
such as compact disc ("CD") players, that use laser technology to achieve
improved audio reproduction performance. The Company's component converts the
digital signals for each stereo channel into audio. Several generations of
products of this type have been developed and introduced for use in digital
audio systems. Involvement in the CD market also helped the Company's early
entry into the digital audio tape ("DAT") and multimedia markets. The Company
believes that the technology developed for its digital audio D/A converter
products enables the Company to develop products for other markets. Burr-Brown's
PCM converters have now been designed into musical instruments, computer games,
automobile sound systems, CD-ROMs for multimedia applications and set top box
tuners for cable and satellite TV.
ISOLATION PRODUCTS DIVISION (BURR-BROWN LTD.)
The Company's Isolation Products Division, which is operated by Burr-Brown's
wholly-owned Scottish subsidiary, focuses on the design, development,
manufacturing, and marketing of isolation amplifiers, isolated analog digital
converters, bus transceivers, and DC-to-DC converters. These products provide
galvanic isolation of input and output signals and thereby achieve reduced
circuit noise interference and prevent harm to people or equipment due to high
voltage transients or current leakage. The product line utilizes optical,
tranformer, and capacitive techniques to produce linear transfer functions
between input and output. In certain products, isolated digital couplers are
used in lieu of opto-couplers in the galvanic isolation of data signals. The
isolation products are used in industrial process control, communication, and in
medical instrumentation.
INTELLIGENT INSTRUMENTATION INC. (III)
Intelligent Instrumentation Inc. designs, manufactures and markets a broad
line of data acquisition products, including plug-in boards, portable data
acquisition systems, microterminals and supporting software for IBM-compatible
PCs, as well as signal conditioning accessories for such systems. These products
are applied worldwide for a wide range of industrial and scientific applications
such as inventory control, package tracking, image pattern recognition and
electro-medical systems. A key part of the data acquisition product line is the
Visual Designer-TM- software, a graphical development environment which enables
users to design applications by connecting functional blocks, called icons, in a
flow diagram. III also offers integrated data collection systems that not only
collect data, but format and deliver that data to a customer's information
system in real time. Representative customers include Mercedes Benz, Siemens,
Nikon Koden, Novellus Systems and Xerox.
POWER CONVERTIBLES CORPORATION (PCC)
Power Convertibles Corporation focuses on the market for DC-to-DC conversion
and battery chargers. PCC is one of the leading suppliers of low power DC/DC
converters as well as products to condition and charge many types of batteries
including cellular telephones. Its products are supplied worldwide to the
computer, medical, industrial, telecommunications, data communications and
instrumentation markets. PCC also designs, manufactures and markets battery
chargers for the cellular telephone market. A significant proportion of PCC's
revenues in recent periods has been generated from a single customer in this
market. PCC has custom design capabilities and has recently established
independent marketing organization in an effort to increase its customer base.
Representative customers include Ericsson, AT&T, Medtronic, Allen-Bradley, SCI
and Johnson Controls.
The Company has from time-to-time received indications of interest with
respect to both III and PCC, and has considered, and may in the future consider,
the sale of its interest in these subsidiaries.
22
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Upon the closing of this offering, the authorized capital stock of the
Company will consist of 40,000,000 shares of Common Stock, $.01 par value, and
2,000,000 shares of Preferred Stock, $.01 par value.
COMMON STOCK
As of July 1, 1995, there were 14,423,696 shares of Common Stock
outstanding, and there were approximately 3,640 holders of record of the Common
Stock. The holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred Stock,
the holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared from time to time by the Board of Directors out of funds
legally available for the payment of dividends. See "Dividend Policy." In the
event of a liquidation, dissolution or winding up of the Company, the holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities and liquidation preferences of any outstanding shares of
Preferred Stock. Holders of Common Stock have no preemptive rights or rights to
convert their Common Stock into any other securities. There are no redemption or
sinking fund provisions applicable to the Common Stock. All outstanding shares
of Common Stock are fully paid and non-assessable, and the shares of Common
Stock to be issued upon completion of this offering will be fully paid and
non-assessable.
PREFERRED STOCK
Pursuant to the Company's Restated Certificate of Incorporation, the Board
of Directors has the authority, without further action by the stockholders, to
issue up to 2,000,000 shares of Preferred Stock in one or more series and to fix
the designations, powers, preferences, privileges, and relative participating,
optional or special rights and the qualifications, limitations or restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be greater than
the rights of the Common Stock. The Board of Directors, without stockholder
approval, will be able to issue Preferred Stock with voting, conversion or other
rights that could adversely affect the voting power and other rights of the
holders of Common Stock. Preferred Stock could thus be issued quickly with terms
calculated to delay or prevent a change in control of the Company or make
removal of management more difficult. See "Risk Factors-- Effect of
Anti-takeover Provisions." Additionally, the issuance of Preferred Stock may
have the effect of decreasing the market price of the Common Stock. At present,
the Company has no plans to issue any of the Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is Bank One,
Arizona, N.A.
23
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below, through their Representatives, Hambrecht & Quist LLC
and Cowen & Company, have severally agreed to purchase from the Company the
following respective number of shares of Common Stock:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ---------------------------------------------------------------- -----------
<S> <C>
Hambrecht & Quist LLC........................................... 535,000
Cowen & Company................................................. 535,000
Alex. Brown & Sons Incorporated................................. 80,000
Dean Witter Reynolds Inc........................................ 80,000
Donaldson, Lufkin & Jenrette Securities Corporation............. 80,000
Gruntal & Co. Incorporated...................................... 80,000
Montgomery Securities........................................... 80,000
Robertson, Stephens & Company, L.P.............................. 80,000
Duff & Phelps Securities Co..................................... 50,000
Furman Selz Incorporated........................................ 50,000
Needham & Company, Inc.......................................... 50,000
SoundView Financial Group, Inc.................................. 50,000
-----------
Total....................................................... 1,750,000
-----------
-----------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent, including the absence of any
material adverse change in the Company's business and the receipt of certain
certificates, opinions and letters from the Company and its counsel and
independent auditors. The nature of the Underwriters' obligation is such that
they are committed to purchase all shares of Common Stock offered hereby if any
such shares are purchased.
The Underwriters propose to offer the shares of Common Stock directly to the
public at the public offering price set forth on the cover of this Prospectus
and to certain dealers at such price less a concession not in excess of $1.08
per share. The Underwriters may allow and such dealers may reallow a concession
not in excess of $.10 per share to certain other dealers. After the public
offering of the shares, the offering price and other selling terms may be
changed by the Representatives.
The Company has granted to the Underwriters an option, exercisable no later
than 30 days after the date of this Prospectus, to purchase up to 262,500
additional shares of Common Stock at the public offering price, less the
underwriting discount, set forth on the cover page of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
have a firm commitment to purchase approximately the same percentage thereof
which the number of shares of Common Stock to be purchased by it shown in the
above table bears to the total number of shares of Common Stock offered hereby.
The Company will be obligated, pursuant to the option, to sell such shares to
the Underwriters to the extent the option is exercised. The Underwriters may
exercise such option only to cover over-allotments made in connection with the
sale of shares of Common Stock offered hereby.
The offering of the shares is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and to withdrawal, cancellation or
modification of the offering without notice. The Underwriters reserve the right
to reject an order for the purchase of shares in whole or in part.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof.
24
<PAGE>
Certain stockholders of the Company, including executive officers, other
executives and directors, who own in the aggregate approximately 5,715,000
shares of Common Stock have agreed that they will not, without the prior written
consent of Hambrecht & Quist LLC acting alone or each of the Representatives
acting jointly, offer, sell, or otherwise dispose of any shares of Common Stock,
options to acquire shares of Common Stock or securities exchangeable for or
convertible into shares of Common Stock owned by them for a period of 90 days
following the effective date of the Registration Statement. The Company has
agreed that it will not, without the prior written consent of Hambrecht & Quist
LLC acting alone or each of the Representatives acting jointly, offer, sell, or
otherwise dispose of any shares of Common Stock, options or warrants to acquire
shares of Common Stock or securities exchangeable for or convertible into shares
of Common Stock during the 90 day period following the effective date of the
Registration Statement, except that the Company may grant additional options
under its stock plans and issue securities under, or pursuant to the exercise of
options granted under, its stock plans.
In general, the rules of the Commission will prohibit the Underwriters from
making a market in the Company's Common Stock during the "cooling off" period
immediately preceding the commencement of sales in the offering. The Commission
has, however, adopted exemptions from these rules that permit passive market
making under certain conditions. These rules permit an underwriter to continue
to make a market subject to the conditions, among others, that its bid not
exceed the highest bid by a market maker not connected with the offering and
that its net purchases on any one trading day not exceed prescribed limits.
Pursuant to these exemptions, the Underwriters, selling group members (if any)
or their respective affiliates intend to engage in passive market making in the
Company's Common Stock during the cooling off period.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Brobeck, Phleger & Harrison, Palo Alto, California and certain legal
matters in connection with the Offering will be passed upon for the Underwriters
by Morrison & Foerster, Palo Alto, California.
EXPERTS
The consolidated financial statements of Burr-Brown Corporation incorporated
by reference in Burr-Brown Corporation's Annual Report (Form 10-K) for the year
ended December 31, 1994, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Prospectus Summary............................. 3
Risk Factors................................... 5
The Company.................................... 11
Use of Proceeds................................ 11
Price Range of Common Stock.................... 11
Dividend Policy................................ 12
Capitalization................................. 12
Selected Consolidated Financial Data........... 13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 14
Business....................................... 17
Description of Capital Stock................... 23
Underwriting................................... 24
Legal Matters.................................. 25
Experts........................................ 25
</TABLE>
1,750,000 SHARES
[LOGO]
COMMON STOCK
--------------
PROSPECTUS
--------------
HAMBRECHT & QUIST
COWEN & COMPANY
SEPTEMBER 22, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
