SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended July 1, 1995, or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-11438
BURR-BROWN CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 86-0445468
________________________ _______________________
(State of Incorporation) (IRS Employer I.D. No.)
6730 South Tucson Boulevard
Tucson, Arizona 85706
________________________________________
(Address of principle executive offices)
(520) 746-1111
_______________________________
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, not including shares held in treasury, as of the close of the
period covered by this report.
Common Stock, $0.01 par value 14,423,696 Shares
<PAGE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
INDEX Page #
_____ ______
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Income, three and six months
ended July 1, 1995 and July 2, 1994 3
Consolidated Statements of Financial Position, July 1,
1995 and December 31, 1994 4
Consolidated Statements of Cash Flows, six months ended
July 1, 1995 and July 2, 1994 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 9
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit 11: Computation of Consolidated Earnings
per Share 10
(b) Reports on Form 8-K: The Company did not file
any reports on Form 8-K during the quarter
ended July 1, 1995
SIGNATURES
Signature Page 11
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<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
1995 1994 1995 1994
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Net Sales $ 69,594 $ 47,607 $129,141 $ 94,962
Cost of Sales 35,796 24,797 67,157 49,278
_________ _________ _________ _________
Gross Profit 33,798 22,810 61,984 45,684
Expenses:
Product Development 6,921 5,583 12,749 10,512
Selling, General
and Administrative 16,811 13,458 32,378 28,039
_________ _________ _________ _________
23,732 19,041 45,127 38,551
Income from Operations 10,066 3,769 16,857 7,133
Interest Expense (315) (529) (598) (1,043)
Other Expense (374) (351) (502) (646)
_________ _________ _________ _________
Income Before Income Taxes 9,377 2,889 15,757 5,444
Provision For Income Taxes 2,532 925 4,255 1,743
_________ _________ _________ _________
Net Income $ 6,845 $ 1,964 $ 11,502 $ 3,701
_________ _________ _________ _________
Earnings Per Common Share $ 0.45 $ 0.14 $ 0.76 $ 0.26
_________ _________ _________ _________
Shares Used In Per Common
Share Calculation 15,212 14,436 15,071 14,355
_________ _________ _________ _________
<FN>
See Notes to Consolidated Financial Statements
</FN>
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<PAGE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of dollars)
<CAPTION>
Jul 01, Dec 31,
1995 1994
_________ _________
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 14,127 $ 9,925
Trade Receivables 54,948 39,642
Inventories 41,220 40,092
Deferred Income Taxes 1,179 331
Other Current Assets 4,209 2,182
_________ _________
Total Current Assets 115,683 92,172
Land, Buildings and Equipment
Land 3,402 3,396
Buildings and Improvements 23,702 21,926
Equipment 91,030 84,133
_________ _________
118,134 109,455
Less Accumulated Depreciation (74,422) (68,072)
Projects in Progress 6,251 4,513
_________ _________
49,963 45,896
Other Assets 5,531 4,940
_________ _________
$171,177 $143,008
_________ _________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 18,771 $ 16,964
Accounts Payable 17,130 12,747
Accrued Expenses 12,065 9,277
Accrued Employee Compensation and Payroll Taxes 7,744 4,834
Income Taxes Payable 4,405 1,630
Current Portion of Long-Term Debt 1,029 1,097
_________ _________
Total Current Liabilities 61,144 46,549
Long-Term Debt 1,895 1,839
Deferred Gain 3,367 4,116
Deferred Income Taxes 1,204 1,182
Other Long-Term Liabilities 2,019 1,700
Commitments and Contingencies
Stockholders' Equity
Preferred Stock - -
Common Stock 147 97
Additional Paid-In Capital 27,099 26,400
Retained Earnings 70,340 58,842
Equity Adjustment From Foreign Currency Translation 5,543 3,504
Treasury Stock (1,581) (1,221)
_________ _________
101,548 87,622
_________ _________
$171,177 $143,008
_________ _________
<FN>
See Notes to Consolidated Financial Statements.
</FN>
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<PAGE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of dollars)
<CAPTION>
Six Months Ended
July 1, July 2,
1995 1994
_________ _________
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 11,502 $ 3,701
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 5,962 5,040
Amortization of Deferred Gain (749) (748)
Provision for Losses on Inventories 2,600 2,712
Credit for Deferred Income Taxes (772) (72)
Loss on Disposition of Equipment 456 65
Gain on Foreign Currency Transactions (185) (12)
Loss (Income) from Unconsolidated Affiliate 26 (68)
Changes in Operating Assets and Liabilities:
Increase in Trade Receivables (11,376) (1,125)
Increase in Inventories (2,498) (2,290)
Increase in Other Assets (1,854) (270)
Increase in Accounts Payable 3,584 918
Increase (Decrease) in Accrued Expenses and
Other Liabilities 8,182 (1,051)
_________ _________
Net Cash Provided by Operating Activities 14,878 6,800
INVESTING ACTIVITIES:
Purchases of Land, Buildings and Equipment (9,537) (5,391)
Proceeds from Sale of Equipment 78 359
_________ _________
Net Cash Used In Investing Activities (9,459) (5,032)
FINANCING ACTIVITIES:
Proceeds from Short-Term and Long-Term Borrowings 436 10,585
Payments of Short-Term and Long-Term Borrowings (1,384) (9,412)
Proceeds from Capital Stock Activity, Net 385 56
_________ _________
Net Cash (Used In) Provided By Financing Activities (563) 1,229
Effect of Exchange Rate Changes (654) (226)
_________ _________
Increase in Cash and Cash Equivalents 4,202 2,771
Cash and Cash Equivalents at Beginning of Year 9,925 13,066
_________ _________
Cash and Cash Equivalents at End of Six Months $ 14,127 $ 15,837
_________ _________
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
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<PAGE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclo-
sures normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the quarter
ended July 1, 1995, are not necessarily indicative of the results to be
expected for the year ending December 31, 1995. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed with the Securities and Exchange Commission.
On April 21, 1995, the Company's Board of Directors declared a three-for-two
stock split in the form of a stock dividend to stockholders of record as of
May 5, 1995. Comparative period earnings per common share and shares used in
the per common share calculation have been adjusted to reflect this three-
for-two stock split.
2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
Jul 1, Dec 31,
1995 1994
_________ _________
<S> <C> <C>
Raw Material $ 13,309 $ 14,334
Work-In-Process 18,929 15,062
Finished Goods 18,095 17,823
_________ _________
50,333 47,219
Valuation Reserve (9,113) (7,127)
_________ _________
$ 41,220 $ 40,092
_________ _________
</TABLE>
3. CONTINGENCIES
The Company is involved in four ground water claims, one of which is still in
the early stages of the legal process. The Company has filed a motion for
dismissal without prejudice on the other three claims and is awaiting approval
of the court. In the one remaining case, based on investigations to date,
management does not believe the Company contributed to the alleged contamin-
ation and therefore is of the opinion that the disposition of this claim will
not result in any material change in the Company's financial condition,
results of operations or liquidity.
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<PAGE>
BURR-BROWN CORPORATION AND SUBSIDIARIES
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Net sales increased from $95.0 million in the first half of 1994 to $129.1
million in the first half of 1995. This increase of 36% reflects increased
sales of many of the Company's products, particularly products for the commun-
ications, computing and digital audio markets. Growth in sales occurred in
all geographic areas and was favorably impacted by changes in U.S. dollar/
foreign currency exchange rates, particularly for the Japanese Yen and the
German Mark. The increase in the Company's net sales also reflects increased
overall product demand throughout the semiconductor industry. Unit volumes
increased significantly in the 1995 period compared to 1994 while average
selling prices decreased somewhat compared to the 1994 period, due largely to
changes in the Company's product mix.
Second quarter bookings of $74 million were up 51% compared to the same period
in 1994. Bookings for the first six months were $150 million, up 54% from the
first six months of last year. The book-to-bill ratio increased slightly for
the quarter to 1.07 compared to 1.03 for the second quarter of 1994.
The 1995 second quarter's gross profit, 49% of net sales, is an increase of two
percentage points over last quarter's margin and an increase of one percentage
point compared to 1994's second quarter, primarily resulting from increased
utilization of manufacturing capacity due to increased sales volume. The
Company's gross margins remained relatively constant at approximately 48% for
the first six months of 1995 compared to the same period in 1994. This reflects
the combined effect of a substantial increase in the Company's sales volumes
that resulted in a higher utilization of its manufacturing capacity, offset by
a change in product mix to faster growing but lower margin products in com-
munications, computing and digital audio.
Product development expenses increased from $10.5 million in the first half
of 1994 to $12.7 million in the first half of 1995 while decreasing from 11.1%
to 9.9% of net sales. 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.
Selling, general and administrative expenses increased from $28.0 million in
the first half of 1994 to $32.4 million in the first half of 1995. This
represents a reduction of selling, general and administration expenses from
29.5% of net sales in 1994 to 25.1% in 1995. The substantial percentage
decrease reflects the allocation of such expenses over substantially higher
sales volumes, the increased percentage of sales made through independent
distributors, and benefits from the consolidation of the Company's European
sales and marketing operations in the fourth quarter of 1994.
As a result of the above-described effects, net income increased substantially
from $3.7 million in the first half of 1994 to $11.5 million in the first half
of 1995. Net income was also impacted by interest and other expenses of $1.7
million in the 1994 period compared to $1.1 million in the 1995 period and by
a first half 1994 tax provision of 32% compared to a tax provision of 27% for
the same period in 1995. The tax rates for both the 1994 and 1995 periods
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.
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<PAGE>
FACTORS AFFECTING FUTURE RESULTS
The Company's future operating results cannot necessarily be predicted based
on past performance, due to a number of factors affecting the Company and the
semiconductor industry. The semiconductor industry is influenced by rapidly
changing technology, the supply and price of raw materials, increased competi-
tion, price erosion, international monetary values and economic conditions
generally. The Company's future success also rests in its ability to make new
product introductions that are timely, achieve market acceptance and produce
acceptable margins. Although the Company believes it has adequate resources
to sustain its current operations, its financial results may be significantly
affected by the above and other factors.
FINANCIAL CONDITION
For the six months ended July 1, 1995, the Company generated a net cash flow
from operations of $15 million, an increase of $8 million over the corres-
ponding period in 1994. Cash and cash equivalents increased $4 million from
December 31, 1994.
Net inventories decreased 8% or $4 million compared to the same period in 1994,
reflecting the Company's continued progress toward reducing its inventory to
sales ratio. The Company's inventory levels increased 3% when compared to the
1994 end-of-year balance due to increasing production levels to meet customer
demands.
Plant and equipment expenditures for the six month period totaled $10 million
while planned capital investments for the entire year are anticipated to range
between $22 million and $26 million. Capital expenditures in the first six
months of 1995 related to enhanced business information systems and equipment
necessary to increase manufacturing capacity. Planned capital investments
for 1995 should primarily be financed by cash from operations, cash reserves,
and, if needed, by borrowing under existing credit lines.
Current assets increased 8% compared to the previous quarter while current
liabilities increased only 4%, causing the Company's current ratio to improve.
The Company's current ratio was 1.89 at July 1, 1995. In addition to its
outstanding term debt, the Company had approximately $63 million in credit
facilities available with domestic and overseas banks at the end of the second
quarter, of which approximately $19 million or 30% was utilized. Management
believes the Company has sufficient capital resources available for the next
12 months.
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 negotia-
tions with the plaintiffs for dismissal that were ultimately unsuccessful. On
September 29, 1993, the Company then answered and denied liability. The Company
is named in three other toxic tort cases that were filed in U.S. District
Court on September 20, 1991, August 7, 1992, and January 9, 1995, respectively.
They are consolidations of individual lawsuits that sought damages for contam-
inating ground water which was then pumped from public wells and consumed.
The Company has filed a motion for dismissal without prejudice on these three
cases and is awaiting approval of the court.
After undertaking extensive hydrological investigations and consultation with
independent environmental consultants, management does not believe the Company
contributed to any alleged contamination and, therefore, is of the opinion
that the disposition of the claims 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 the claims.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
With repsect to the following three pending litigation matters, which have
been previously reported in the Form 10-K for the fiscal year ended December
31, 1994, the Company has filed a motion for dismissal without prejudice,
and is awaiting approval of the court.
a. YSLAVA ET.AL. VERSUS HUGHES AIRCRAFT COMPANY.
b. LANIER VERSUS HUGHES AIRCRAFT COMPANY.
c. ARELLANO VERSUS HUGHES AIRCRAFT COMPANY.
- 9 -
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 11
BURR-BROWN CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED EARNINGS PER SHARE
(Unaudited)
Earnings per share are computed using the weighted average number of shares
outstanding plus incremental shares issuable upon exercise of outstanding
options under the treasury stock method.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 1, July 2, July 1, July 2,
1995 1994 (1) 1995 1994 (1)
__________ __________ __________ __________
<S> <C> <C> <C> <C>
INCOME:
Net Income $ 6,845,000 $ 1,964,000 $11,502,000 $ 3,701,000
PRIMARY EARNINGS PER SHARE:
Weighted Average Number
of Shares Outstanding 14,383,000 14,312,000 14,362,000 14,307,000
Net Effect of Dilutive
Stock Options Based on
the Treasury Stock Method
Using the Average Market
Price of Common Stock 829,000 124,000 709,000 48,000
__________ __________ __________ __________
Common Stock and Common
Stock Equivalents 15,212,000 14,436,000 15,071,000 14,355,000
__________ __________ __________ __________
Primary Earnings per Share $ 0.45 $ 0.14 $ 0.76 $ 0.26
__________ __________ __________ __________
FULLY DILUTED EARNINGS
PER SHARE:
Weighted Average Number
of Shares Outstanding 14,383,000 14,312,000 14,362,000 14,307,000
Net Effect of Dilutive
Stock Options Based on
the Treasury Stock Method
Using the End of Period
Market Price of Common
Stock, If Higher Than
Average 905,000 124,000 899,000 56,000
__________ __________ __________ __________
Common Stock and Common
Stock Equivalents 15,288,000 14,436,000 15,261,000 14,363,000
__________ __________ __________ __________
Fully Diluted Earnings
per Share $ 0.45 $ 0.14 $ 0.75 $ 0.26
__________ __________ __________ __________
<FN>
(1) Common share information was restated to reflect a 3-for-2 stock split
effective May, 1995.
</FN>
</TABLE>
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Regis-
trant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BURR-BROWN CORPORATION
___________________________________
(Registrant)
August 15, 1995 SYRUS P. MADAVI
______________ ___________________________________
(Date) Syrus P. Madavi
President and Chief Executive Officer
JOHN L. CARTER
___________________________________
John L. Carter
Executive Vice President and
Chief Financial Officer
- 11 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> APR-01-1995 JUL-01-1995
<CASH> 13,697 14,127
<SECURITIES> 0 0
<RECEIVABLES> 49,117 54,948
<ALLOWANCES> 0 0
<INVENTORY> 39,694 41,220
<CURRENT-ASSETS> 106,644 115,683
<PP&E> 121,201 124,385
<DEPRECIATION> 71,956 74,422
<TOTAL-ASSETS> 161,722 171,177
<CURRENT-LIABILITIES> 58,931 61,144
<BONDS> 3,488 2,924
<COMMON> 97 147
0 0
0 0
<OTHER-SE> 93,919 101,401
<TOTAL-LIABILITY-AND-EQUITY> 161,722 171,177
<SALES> 59,547 129,141
<TOTAL-REVENUES> 59,547 129,141
<CGS> 31,361 67,157
<TOTAL-COSTS> 31,361 67,157
<OTHER-EXPENSES> 21,523 45,629
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 283 598
<INCOME-PRETAX> 6,380 15,757
<INCOME-TAX> 1,723 4,255
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4,657 11,502
<EPS-PRIMARY> .31 .76
<EPS-DILUTED> .31 .76
