UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the
- ------ Securities Exchange Act of 1934
For the quarterly period ended April 1, 2000
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.
As of April 1, 2000, there were 56,036,556 Shares of Common Stock,
$0.01 par outstanding
BURR-BROWN CORPORATION AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page #
Item 1 Financial Statements (Unaudited)
Consolidated Statements of Income, Three Months
Ended April 1, 2000, and April 3,1999 3
Consolidated Balance Sheets, April 1, 2000,and
December 31, 1999 4
Consolidated Statements of Cash Flows, Three
Months Ended April 1, 2000, and April 3, 1999 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3 Quantitative and Qualitative Disclosure
of Market Risk 12
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES
Signature Page 13
<PAGE> 2
PART I. FINANCIAL INFORMATION
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
Apr. 1, Apr. 3,
2000 1999
-------- -------
<S> <C> <C>
Net Revenue $ 90,554 $61,007
Cost of Goods Sold 40,760 30,228
-------- -------
Gross Margin 49,794 30,779
% of revenue 55.0% 50.5%
Expenses:
Research & Development 13,071 10,063
% of revenue 14% 16%
Sales, Marketing, General and
Administrative 12,830 11,091
% of revenue 14% 18%
-------- -------
Total Operating Expenses 25,901 21,154
% of revenue 29% 35%
Income from Operations 23,893 9,625
% of revenue 26% 16%
Interest Expense 1,227 117
Other (Income) Expense (3,387) (717)
-------- -------
Income Before Income Taxes 26,053 10,225
% of revenue 29% 17%
Provision for Income Taxes 7,556 2,761
Effective Tax Rate 29% 27%
-------- -------
Net Income $ 18,497 $ 7,464
% of revenue 20% 12%
======== =======
Basic Earnings per Common Share $ 0.33 $ 0.14
======== =======
Shares used in basic per share
calculation 55,816 55,038 (1)
======== =======
Diluted Earnings per Common Share $ 0.31 $ 0.13
======== =======
Shares used in diluted per share
calculation 60,605 57,372 (1)
======== =======
<FN>
See Notes to Consolidated Financial Statements.
<FN>
(1) Common share information reflects a 3 for 2 stock split
effective December 1999.
</FN>
</TABLE>
<PAGE> 3
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
<TABLE>
<CAPTION>
Apr. 1, Dec. 31,
2000 1999
----------- ---------
<S> <C> <C>
(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents $ 399,448 $ 118,132
Short-Term Investments 31,671 45,189
Trade Receivables 67,585 66,068
Inventories 53,051 49,761
Deferred Income Taxes 10,340 10,073
Other 9,110 9,133
---------- ---------
Total Current Assets 571,205 298,356
Land, Buildings and Equipment
Land 5,206 5,210
Buildings and Improvements 33,671 33,721
Equipment 184,111 179,628
---------- ---------
222,988 218,559
Less Accumulated Depreciation (124,359) (120,307)
---------- ---------
98,629 98,252
Other Assets 11,051 3,109
----------- ---------
$ 680,885 $ 399,717
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 14,393 $ 16,756
Accounts Payable 22,706 17,900
Accrued Expenses 5,556 4,229
Accrued Employee Compensation and
Payroll Taxes 7,507 8,940
Deferred Profit from Distributors 10,356 10,143
Income Taxes Payable 13,198 9,506
Current Portion of Long-Term Debt 1,209 1,296
----------- ---------
Total Current Liabilities 74,925 68,770
Long-Term Debt 251,720 2,053
Deferred Income Taxes 5,092 4,995
Other Long-Term Liabilities 656 681
Stockholders' Equity
Preferred Stock - -
Common Stock 581 577
Additional Paid-In Capital 116,414 108,865
Retained Earnings 249,491 230,995
Accumulated Other Comprehensive Income 2,585 3,303
Treasury Stock (20,579) (20,522)
----------- ---------
348,492 323,218
----------- ---------
$ 680,885 $ 399,717
=========== =========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 4
BURR-BROWN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
Apr. 1, Apr. 3,
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 18,497 $ 7,464
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 5,180 4,585
Benefit from Deferred Income Taxes (213) (47)
Increase (Decrease) in Deferred
Profit from Distributors 213 (1,623)
Other 76 363
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Trade Receivables (2,666) (1,174)
(Increase) Decrease in Inventories (3,339) 1,086
(Increase) Decrease in Other Assets (1,219) (837)
Increase (Decrease) in Accounts Payable 5,030 (1,346)
Increase (Decrease) in Accrued
Expenses and Other Liabilities 7,936 2,190
-------- --------
Net Cash Provided By Operating Activities 29,495 10,661
INVESTING ACTIVITIES:
Purchases of Investments - (2,033)
Maturities of Investments 13,537 3,552
Purchases of Land,Buildings and Equipment (5,868) (4,806)
-------- --------
Net Cash Provided by (Used in) Investing
Activities 7,669 (3,287)
FINANCING ACTIVITIES:
Proceeds from Short-Term and Long-Term
Borrowings 243,125 40
Payments on Short-Term and Long-Term
Borrowings (2,175) (299)
Proceeds from (Payments for) Capital
Stock Activity, Net 3,413 (3,992)
-------- --------
Net Cash Provided By (Used In) Financing
Activities 244,363 (4,251)
Effect of Exchange Rate Changes (211) (912)
-------- --------
Increase in Cash and Cash Equivalents 281,316 2,211
Cash and Cash Equivalents at Beginning
of Year 118,132 72,427
-------- --------
Cash and Cash Equivalents at End of
Three Months $399,448 $ 74,638
======== ========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE> 5
BURR-BROWN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands except per share amounts)
1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the quarter ended April 1, 2000,
are not necessarily indicative of the results to be expected for
the year ending December 31, 2000. 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, 1999, as filed with the Securities
and Exchange Commission.
2. EARNINGS PER SHARE
The following table sets forth the shares used in the computation
of basic and diluted earnings per share for the three months
ended April 1, 2000 and April 3, 1999. References to share and
per share amounts have been restated to reflect a three-for-two
stock split declared December 2, 1999 and distributed on December
20, 1999, to shareholders of record on December 10, 1999.
Fractional shares were paid in cash to those stockholders whose
shares on the record date were not evenly divisible by two.
<TABLE>
<CAPTION>
Apr. 1, Apr. 3,
2000 1999
--------- --------
<S> <C> <C>
Weighted average common shares
outstanding 55,816 55,038
Dilutive effect of stock options
outstanding using the Treasury
Stock Method 4,789 2,334
--------- --------
Shares used in computed Diluted
Earnings Per Share 60,605 57,372
========= ========
</TABLE>
3. DEBT
On February 24, 2000, the Company completed a private placement
pursuant to SEC Rule 144 of $250,000 of 4 1/4 % Convertible
Subordinated Notes due February 15, 2007 with semiannual interest
payable on February 15 and August 15 of each year commencing
August 15, 2000. The Notes are convertible, at the option of the
holder, into the Company's common stock at any time after the
original purchase date, at a conversion price of $57.78 per
share, subject to adjustment in certain events. The Company has
agreed to register the Notes and the common stock issuable upon
conversion of the Notes for sale by filing a registration
statement with the SEC within 90 days after the offering. The
net proceeds of the offering were approximately $243,000 after
payment of placement discounts and expenses of the offering,
which will be amortized over the term of the Notes. The proceeds
have been invested primarily in interest bearing mutual
funds and reported as cash equivalents on our balance sheet.
4. COMPREHENSIVE INCOME
The components of comprehensive income, net of related tax, for
the three months ended April 1, 2000 and April 3, 1999 are as
follows:
<TABLE>
<CAPTION>
Apr. 1, Apr. 3,
2000 1999
--------- --------
<S> <C> <C>
Net Income $ 18,497 $ 7,464
Unrealized (loss)/gain on cash
flow hedges (125) 398
Unrealized gain/(loss) on
investments 15 (11)
Foreign currency translation
adjustment (608) (1,117)
--------- --------
Comprehensive income $ 17,779 $ 6,734
======== ========
</TABLE>
<PAGE> 6
The components of accumulated other comprehensive income, net of
related tax, at April 1, 2000 and December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Apr. 1, Dec. 31,
2000 1999
--------- ---------
<S> <C> <C>
Unrealized (loss) on cash flow
hedges $ (321) $ (196)
Unrealized gain / (loss) on
investments 11 (4)
Foreign currency translation
adjustment 2,895 3,503
--------- ---------
Accumulated other comprehensive
income $ 2,585 $ 3,303
========= =========
</TABLE>
5. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following:
Apr. 1, Dec. 31,
2000 1999
--------- --------
<S> <C> <C>
Raw Materials $ 8,048 $ 7,661
Work-in-Process 32,556 30,543
Finished Goods 12,447 11,557
--------- --------
$ 53,051 $ 49,761
======== ========
</TABLE>
6. TAX RATE
The effective tax rate for 2000 is estimated to be approximately
29%. The Company's effective tax rate is lower than the U.S.
statutory rate due to expected benefits from tax exempt investment
income, a foreign sales corporation, and tax credits.
7. BUSINESS SEGMENT DATA
The Company has three reportable segments: North American
(principally the United States), Far Eastern (principally Japan,
but including Singapore beginning in 1999) and European
(principally the United Kingdom, France, Germany, and Italy).
Each of these segments derives revenue from the sale of the full
array of the Company's product lines, although the Far Eastern
segment has a higher concentration of sales from certain mixed
signal products.
Segment information at and for the three months ended April 1,
2000 and April 3, 1999 is as follows:
<TABLE>
<CAPTION>
Apr. 1, Apr. 3,
2000 1999
--------- ---------
<S> <C> <C>
Net Revenue:
North American Operations:
Unaffiliated customers $ 33,748 $ 23,322
Foreign unaffiliated
customers 18,066 11,641
Consolidated subsidiaries 22,223 16,840
--------- ---------
74,037 51,803
European Operations:
Unaffiliated customers 11,344 7,969
Far Eastern Operations:
Unaffiliated customers 27,396 18,075
Consolidated subsidiaries 7,236 4,251
--------- ---------
34,632 22,326
Eliminations (29,459) (21,091)
--------- ---------
$ 90,554 $ 61,007
======== =========
<PAGE> 7
Apr. 1, Apr. 3,
2000 1999
--------- --------
<S> <C> <C>
Income Before Income Taxes:
North American Operations $ 19,133 $ 9,083
European Operations 1,053 470
Far Eastern Operations 5,854 539
Eliminations - primarily
United States 13 133
--------- --------
$ 26,053 $ 10,225
========= ========
Apr. 1, Apr. 3,
2000 1999
--------- ---------
<S> <C> <C>
Identifiable Assets:
North American Operations $ 629,437 $ 297,729
European Operations 18,078 23,448
Far Eastern Operations 56,606 45,453
Eliminations (23,236) (28,043)
--------- ---------
$ 680,885 $ 338,587
======== =========
</TABLE>
8. FOREIGN CURRENCY CONTRACTS AND HEDGING ACTIVITIES
Due to the Company's significant international sales, both to
unaffiliated customers and to its foreign subsidiaries, the Company is
exposed to the effect of foreign exchange rate fluctuations on the
future U.S. dollar value of its revenue, operating expense
transactions, as well as the U.S. dollar value of its accounts
receivable denominated in foreign currencies. For currencies other
than the Japanese Yen, the Company mainly uses the natural hedges
resulting from intercompany payables and expenses incurred in local
currencies to dampen the effect of foreign currency fluctuations. Due
to the significance of Japan to its consolidated operations, the
Company uses foreign currency forward and purchased options contracts
to hedge forecasted Yen denominated sales transactions and specific
Yen dominated cost transactions and uses foreign currency forward
contracts to hedge Yen denominated accounts receivable.
The Company adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as of October 4, 1998, the
first day of its fourth fiscal quarter in 1998. At April 1,
2000, the Company's foreign currency contracts designated as cash
flow hedges consisted of purchased options and forward contracts.
These contracts had a notional value of $18,938 and hedged
anticipated Japanese Yen denominated sales transactions. The
Company assesses the effectiveness of its foreign currency
purchased option and forward contracts using the spot rate and
views the option premium as the inherently ineffective portion of
its purchased option contracts. The ineffectiveness resulting
from such contracts is reflected in other (income) expense, and
was immaterial in the three months ended April 1, 2000. The
loss recorded as other comprehensive income on cash flow hedges
amounted to $321 net of the deferred tax effect of $197. Such
amounts will be reflected in the Company's income statements
between April 2000 and September 2000 as the forecasted
transactions occur. Gains on fair value hedges were reflected in
other (income) expense, and were immaterial in the three months
ended April 1, 2000. No contracts were designated as fair value
hedges at April 1, 2000. Gains on fair value and cash flow
hedges were immaterial to the three months ended April 3, 1999.
The following table presents the gross notional amounts of these
foreign currency contracts and their fair value (based on prices
or forward rates quoted by dealers) as of April 1, 2000:
Foreign Currency Contracts-Japanese Yen
Foreign Currency Contracts Notional Fair Value
- ------------------------------------------------------------
Forward contracts $ 13,426 $ (422)
Purchased option contracts 5,512 -
----------------------------
$ 18,938 $ (422)
====== ========
<PAGE> 8
BURR-BROWN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUE. First quarter 2000 revenue was $90.6 million, the
highest quarterly revenue in our history, compared to $61.0
million in the first quarter of 1999. This represents a 48.4%
increase in revenue over the first quarter of 1999 and a 7.6%
increase in revenue over the preceding fourth quarter of 1999.
This marked the third consecutive quarter that the Company
achieved record revenue. Revenue for all product lines increased
relative to the first quarter of 1999. Strongest growth was
achieved in our newer Communications, Audio and Video and
Computer markets. Revenue from Communications increased 48.5%
from the same period a year ago and 16.2% sequentially. Revenue
for the Audio and Video market increased 65.7% from the same
period a year ago and 11.4% sequentially. Revenue from the
Computing market increased 76.2% from the same period a year
ago. The Company has experienced broad-based demand across all
its served markets and geographic regions.
GROSS MARGIN. Gross margin improved 150 basis points to 55% in
the first quarter of 2000 from 53.5% in the fourth quarter of
1999. The gross margin percentage was 50.5% in the first quarter
of 1999. This improvement was driven by the increase in revenues
discussed above combined with higher factory utilization,
manufacturing cost improvements and a higher margin product mix
driven by our targeted market applications. This marks the
fourth consecutive quarter in which the Company has set a new
record for gross margin as a percent of sales. It is the Company's
intent to increase its penetration of high volume, fast growing,
emerging applications. It is the Company's goal that this
strategy, if successfully executed, will increase unit volumes,
decrease aggregate average selling price and expand gross margins
due to increased operating leverage.
RESEARCH AND DEVELOPMENT. Research and Development (R&D) expenses
of 14.4% of revenue in the first quarter of 2000 were lower in
percentage terms and higher in absolute dollars by $3.0 million
than the first quarter of 1999. The lower percentage is primarily
due to the increased revenues. The Company's strategy is to
continue to maintain a substantial level of R&D investment as the
primary driver of revenue growth while constraining growth in
Sales, Marketing, General & Administrative (SMG&A) expenses.
Increases in R&D spending are the result of technical hiring and
an increase in new product output.
SALES, MARKETING, GENERAL & ADMINISTRATIVE. SMG&A expenses
continue to decline as a percentage of revenue. SMG&A expenses
declined to 14.2% of revenue for the first quarter of 2000 from
14.8% during the fourth quarter and 18.2% in the first quarter
of 1999. The sequential increases in SMG&A in absolute dollars
is due to higher sales related costs and increased variable
compensation expense.
OPERATING INCOME. First quarter operating income was $23.9
million or 26.4% of revenue, an increase of 21% over the previous
quarter and 148% higher than the first quarter of 1999. This
increase was due to higher revenues, improved gross margin and
modest increases in operating expenses.
OTHER INCOME. Other income was $2.2 million for the first
quarter of 2000, an increase of 260% over the first quarter of
1999. This was due primarily to an increase in interest income
from higher levels of invested cash and equivalents. Cash and
equivalents increased as a result of cash flow generated from
operations and net interest earned on the proceeds from
convertible notes that were issued during the quarter.
PROVISION FOR INCOME TAXES. The effective tax rate for 2000 is
expected to be approximately 29%. The Company's effective tax
rate is lower than the U.S. statutory rate due to expected
benefits from tax exempt investment income, a foreign sales
corporation, and tax credits. The effective tax rate increased 2
percentage points over 1999 due to the expectation of higher
earnings in Japan and reduced foreign sales corporation benefits.
NET INCOME. Net income for the first quarter of 2000 was a
record $18.5 million or 20.4% of revenue. This represents an
increase of 22% sequentially on a 7.6% increase in revenue from
the fourth quarter of 1999 and 148% on a 48% increase in revenue
above the same quarter a year ago. This marked the fourth
consecutive quarter of record net income and the first time in
the Company's history that its net income exceeded 20% of
revenue. The increase in net income was a result of increased
revenue, a higher margin product mix resulting in record gross
margins, improved manufacturing efficiencies and continued SMG&A
cost containment. The diluted earnings per share for the quarter
were $.31 compared to $.13 for the first quarter of 1999 and $.26
in the preceding quarter.
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Our cash, cash equivalents and investments increased by $267.8
million to $431.1 million as of April 1, 2000 from $163.3 million
at December 31, 1999. The increase was primarily from the proceeds
of a $250 million convertible note issuance and free cash flow
from operations. The purpose of the financing was to increase
the Company's financial flexibility as it pursues strategic
purposes such as acquisitions and capacity expansions.
Accounts receivable were $67.6 million at April 1, 2000, an
increase of $1.5 million from $66.1 million at December 31, 1999.
This small increase was a result of the higher levels of revenue.
Days sales outstanding decreased by 2 days to 69 days at April 1,
2000 from 71 days at December 31, 1999. This improvement was due
to increased shipment linearity and enhanced collection efforts.
Inventories increased by $3.3 million, or 6.6%, to $53.1
million at April 1, 2000 from $49.8 million at December 31, 1999.
This increase is due primarily to steps performed by the Company
to insure a source of supply in this very strong demand
environment. The increase is almost exclusively in products
procured from external wafer foundries in anticipation of higher
revenue in the remaining quarters of the year. Inventory
turns in the first quarter of 2000 were approximately 3.1, up
from 2.4 in the same period in 1999.
Net deferred tax assets were essentially flat at $5.2 million
at April 1, 2000, compared to $5.1 million at December 31, 1999.
Accounts payable and accrued expenses increased by $4.7 million,
or 15.1%, to $35.8 million at April 1, 2000 as compared to $31.1
million at December 31, 1999, due primarily to a higher level of
manufacturing activity. Deferred income remained essentially flat
as compared to December 31, 1999 reflecting stable distributor
inventories.
Capital expenditures have totaled $5.9 million thus far for
2000. Significant portions of the capital expenditures were for
test capacity expansion given recent unit volume increases. We
expect to make approximately $30-35 million of additional capital
expenditures during the remainder of 2000.
At April 1, 2000, total debt was $267.3 million, of which $252.9
million was term debt. This represents a $247.2 million increase
in total debt over 1999. Term debt of $252.9 million is 94.6% of
total debt. On February 24, 2000, the Company issued $250 million
of convertible notes with a seven-year term, representing 93.5% of
total debt. Debt issued in connection with our foreign operations
was $2.9 million and is 1.1% of total debt, and represents
interest rate arbitrage in Japan. In addition credit facilities
of approximately $42.8 million, including overdraft credit
facilities with both domestic and international banks, were
available to us at April 1, 2000, of which approximately $14.4
million, or 33.6%, was utilized, representing 5.4% of total debt.
Our current ratio improved to 7.62 at April 1, 2000, from 4.34
at December 31, 1999. Current ratio improvement was primarily due
to increases in cash and investments resulting from the
convertible note issuance and free cash flow generated from
operations. Our debt-to-equity ratio increased in the first
quarter of 2000 to .77 from .06 at December 31, 1999 as a result
of the convertible note issuance.
We believe that our existing liquid resources, expected cash
generated from operations and existing credit facilities will be
adequate to meet our operating and capital requirements and
obligations for at least the next 12 months, while also providing
the necessary funds to pursue strategic purposes such as
strategic acquisitions and major capacity expansions.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
In addition to historical information, this Form 10-Q contains
statements relating to our future expectations. These statements
include certain projections of revenues, expense levels, R&D
investments and the results thereof, our ability to increase and
maintain favorable product mix and profit margins, and business
trends which are "forward-looking." The words "believe,"
"expect," "intend," "anticipate," "project" and similar
expressions identify forward-looking statements, which speak only
as of the date the statement was made. Such forward-looking
statements are within the meaning of that term in Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-
looking statements also include express or implied statements
with respect to the growth of the semiconductor market, the
growth of the communication, computing and consumer markets, the
introduction of new products, the ability to develop application
specific products with customers, the demand for analog and mixed
signal products, competitive advantages resulting from our pool
of experienced analog designers, the life cycle of our customers'
products, our ability to access working capital, our anticipated
capital expenditures, the success of cost reduction strategies,
the impact of foreign currency fluctuations, our product pricing
levels and the impact of litigation on our business. We do not
undertake to update or revise the forward-looking statements,
whether as a result of new information, future events or otherwise.
<PAGE> 10
Actual results may differ materially from projected results as
a result of certain risks and uncertainties. These risks and
uncertainties include, without limitation, those described in
Exhibit 99, "Risk Factors," to our Annual Report on Form 10-K
for the fiscal year ended December 31, 1999, as well as those set
forth below and those detailed from time to time in our filings
with the SEC or other public announcements:
* fluctuations in manufacturing, assembly and test yields;
* the availability and pricing of wafer supplies;
* availability and utilization of manufacturing capacity;
* retention and recruitment of key management and technical
personnel;
* successful development and timely introduction of new
products;
* demand for and market acceptance of new and existing
products;
* product obsolescence;
* global and market conditions, including, without limitation,
the cyclical nature of the semiconductor industry and the
markets related to our and our customers' products;
* pricing pressures and other competitive factors;
* changes in product mix;
* our ability to develop and implement new technologies and to
obtain protection of the related intellectual property;
* our labor relations and those of our customers and suppliers;
* our successful integration of potential acquisitions;
* risks related to our international business operations; and
* other risks and uncertainties.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
MARKET RISKS: The Company is exposed to certain financial market
risks, principally changes in interest rates and foreign currency
exchange rates.
INTEREST RATE RISKS: The Company's interest rate risk primarily
relates to its investments and debt held at April 1, 2000. The
Company's cash equivalents and short-term investments had a fair
value of $417.1 million with a weighted yield of 6.07%. We held
no long-term investments at April 1, 2000. It is the objective
of the Company to concentrate investments in tax advantaged
securities to maximize after tax return.
The Company's debt at April 1, 2000 was $267.3 million, of which
93.5% relates to a fixed rate debt obligation. An increase in
interest rates would not significantly increase interest expense
due to the fixed nature of this obligation.
<PAGE> 11
FOREIGN CURRENCY RISKS: International markets account for a
majority of the Company's revenue. The resulting transactions
have exchange rate fluctuation risk associated with them. The
Company acts to minimize the impact of foreign currency exchange
rate transactions through natural hedges afforded by its
significant foreign operations and through the use of financial
hedges in the form of forward contracts and option contracts.
These contracts have historically been in three currencies,
Japanese Yen, British Pounds and German Marks, although such
contracts have been exclusively in Japanese Yen in 1998 and 1999
and thus far in 2000. The following summarizes the foreign
currency forward and option contracts, which settle between
April 2000 and September 2000, in effect at April 1, 2000:
Notional Weighted Fair
Amount Ave. Rate Value
----------------------------------------
Japanese Yen Forward
Contracts $13,426,000 106.06 $(422,000)
Japanese Yen Option
Contracts 5,512,000 108.87 ---
________________________________________________________________
Total $18,938,000 $(422,000)
========================================
<PAGE> 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27.Financial Data Schedule.
b. Reports on Form 8-K: The Company filed a Report on Form 8-K
on February 25, 2000 relating to its private placement of $250
million of 4 1/4 percent Convertible Subordinated Notes due 2007.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BURR-BROWN CORPORATION
----------------------
Registrant
By: J. SCOTT BLOUIN
----------------
J. Scott Blouin
Chief Financial Officer
Principal Accounting Officer
Date: May 16, 2000
------------
<PAGE> 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF BURR-BROWN CORPORATION FOR THE
QUARTER ENDED APRIL 1, 2000
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> APR-1-2000
<CASH> 399,448
<SECURITIES> 31,671
<RECEIVABLES> 68,285
<ALLOWANCES> 700
<INVENTORY> 53,051
<CURRENT-ASSETS> 571,205
<PP&E> 222,988
<DEPRECIATION> 124,359
<TOTAL-ASSETS> 680,885
<CURRENT-LIABILITIES> 74,925
<BONDS> 250,000
0
0
<COMMON> 581
<OTHER-SE> 347,911
<TOTAL-LIABILITY-AND-EQUITY> 680,885
<SALES> 90,554
<TOTAL-REVENUES> 90,554
<CGS> 40,760
<TOTAL-COSTS> 40,760
<OTHER-EXPENSES> 25,901
<LOSS-PROVISION> 18
<INTEREST-EXPENSE> 1,227
<INCOME-PRETAX> 26,053
<INCOME-TAX> 7,556
<INCOME-CONTINUING> 18,497
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,497
<EPS-BASIC> 0.33
<EPS-DILUTED> 0.31
</TABLE>
