<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 3, 1999
---------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- -----------
Commission file number 1-10464
-------
DALLAS SEMICONDUCTOR CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 75-1935715
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4401 SOUTH BELTWOOD PARKWAY, DALLAS, TEXAS 75244-3292
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 371-4000
--------------
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
------- --------
Number of shares outstanding of the registrant's Common Stock as of
November 7, 1999: 29,380,823.
-----------
<PAGE> 2
DALLAS SEMICONDUCTOR CORPORATION
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS PAGE NO.
--------
<S> <C>
Condensed Consolidated Statements of Income (Unaudited)
Three months and nine months ended October 3, 1999
and September 27, 1998 ............................................... 3
Condensed Consolidated Balance Sheets
October 3, 1999 (Unaudited) and January 3, 1999 ...................... 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine months ended October 3, 1999 and September 27, 1998 ............. 5
Notes to Condensed Consolidated Financial Statements ................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................. 7 - 9
PART II. OTHER INFORMATION
ITEMS 1. THROUGH 4. ................................................... 10
ITEM 5. OTHER INFORMATION ........................................ 10 - 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .............................. 12
SIGNATURE ............................................................. 13
EXHIBIT 27.1 .......................................................... 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DALLAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months Nine months
Ended Ended
------------------------ -----------------------
(In thousands, except Oct. 3, Sept. 27, Oct. 3, Sept. 27,
per share amounts) 1999 1998 1999 1998
- ---------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $101,572 $ 83,099 $284,147 $257,576
Operating costs and expenses:
Cost of sales 48,978 39,433 136,600 122,269
Research and development 12,799 11,442 36,833 35,800
Selling, general and administrative
15,845 13,671 44,706 42,906
-------- -------- -------- --------
Total costs and expenses 77,622 64,546 218,139 200,975
-------- -------- -------- --------
Operating income 23,950 18,553 66,008 56,601
Interest income, net 1,740 1,129 5,027 3,563
-------- -------- -------- --------
Income before income taxes 25,690 19,682 71,035 60,164
Provision for income taxes 8,015 6,298 22,163 19,253
-------- -------- -------- --------
Net income $ 17,675 $ 13,384 $ 48,872 $ 40,911
======== ======== ======== ========
Net income per share, basic $ 0.61 $ 0.48 $ 1.70 $ 1.46
Net income per share, diluted $ 0.57 $ 0.45 $ 1.59 $ 1.37
-------- -------- -------- --------
Shares used to calculate net income per share:
Basic 28,935 27,998 28,680 27,930
Diluted 30,993 29,756 30,717 29,868
-------- -------- -------- --------
Dividends declared per share $ 0.05 $ 0.04 $ 0.15 $ 0.12
-------- -------- -------- --------
</TABLE>
See accompanying notes.
3
<PAGE> 4
DALLAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Oct. 3, Jan. 3,
(In thousands, except share and per share amounts) 1999 1999
- ------------------------------------------------- --------- ---------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 177,590 $ 127,996
Accounts receivable, net 52,193 45,933
Inventories 74,707 72,390
Deferred tax assets 14,002 10,691
Other current assets 8,554 7,349
--------- ---------
Total current assets 327,046 264,359
Property, plant and equipment, at cost:
Land 8,775 8,770
Building and improvements 73,684 74,890
Machinery and equipment 354,351 313,300
--------- ---------
436,810 396,960
Less accumulated depreciation (242,824) (205,826)
--------- ---------
Property, plant and equipment, net 193,986 191,134
Other assets 6,972 5,545
--------- ---------
$ 528,004 $ 461,038
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 23,613 $ 15,435
Accrued salaries and benefits 14,187 9,395
Accrued taxes other than income 3,691 4,030
Other accrued liabilities 11,502 12,613
Income taxes payable 3,537 4,813
--------- ---------
Total current liabilities 56,530 46,286
Stockholders' equity:
Preferred stock, $0.10 par value;
5,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock, $0.02 par value; 40,000,000
shares authorized; issued:
29,388,419 shares at October 3, 1999, and
28,333,261 shares at January 3, 1999 588 567
Additional paid-in capital 141,177 119,553
Retained earnings 341,451 296,889
Treasury stock, shares at cost:
334,693 shares at October 3, 1999, and
108,425 shares at January 3, 1999 (11,742) (2,257)
--------- ---------
Total stockholders' equity 471,474 414,752
--------- ---------
$ 528,004 $ 461,038
========= =========
</TABLE>
See accompanying notes.
4
<PAGE> 5
DALLAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------
Oct. 3, Sept. 27,
(In thousands) 1999 1998
- --------------------------------------------------- --------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 48,872 $ 40,911
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation 36,998 32,457
Net change in working capital accounts 9,654 (5,128)
--------- ---------
Net cash provided by operating activities 95,524 68,240
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment (39,850) (62,147)
Proceeds from disposition of assets -- 250
Increase in other assets (1,427) (384)
--------- ---------
Net cash used in investing activities (41,277) (62,281)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of stock
upon exercise of stock options 9,142 5,463
Purchase of treasury stock (9,485) --
Dividends paid to shareholders (4,310) (3,353)
--------- ---------
Net cash (used in) provided by financing activities (4,653) 2,110
--------- ---------
Net change in cash and short-term investments 49,594 8,069
Cash and short-term investments at
beginning of period 127,996 114,608
--------- ---------
Cash and short-term investments at end of period $ 177,590 $ 122,677
========= =========
Cash payments for income taxes $ 14,247 $ 10,401
Supplementary schedule of non-cash financing activities:
Reduction of income tax payable and increase
in paid-in capital resulting from the tax
benefit of stock option exercises $ 12,503 $ 4,891
Disposition of assets $ -- $ 940
</TABLE>
See accompanying notes.
5
<PAGE> 6
DALLAS SEMICONDUCTOR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. INTERIM ACCOUNTING POLICY
The accompanying condensed consolidated financial statements have not been
audited by independent auditors, except for the balance sheet as of January 3,
1999. In the opinion of the Company's management, the accompanying financial
statements reflect all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the Company's financial position at
October 3, 1999 and January 3, 1999, and results of operations and cash flows
for the periods presented.
Certain footnote information has been condensed or omitted from these financial
statements. Therefore, these financial statements should be read in conjunction
with the financial statements and related notes included in the Company's Annual
Report on Form 10-K for the year ended January 3, 1999. Results of operations
for the three and nine month periods ended October 3, 1999 are not necessarily
indicative of results to be expected for the full year.
2. INVENTORIES (In thousands)
<TABLE>
<CAPTION>
Oct. 3, Jan. 3,
1999 1999
------- -------
<S> <C> <C>
Raw materials $ 8,971 $ 7,181
Work-in-process 52,790 49,883
Finished goods 12,946 15,326
------- -------
$74,707 $72,390
======= =======
</TABLE>
Inventories are stated at the lower of standard cost, which approximates actual
cost (first-in, first-out), or market.
3. INCOME TAXES
The provision for income taxes includes estimated federal and state income taxes
at statutory rates and a deferred tax benefit for the three and nine month
periods ended October 3, 1999 of $1,937,000 and $3,311,000, respectively. The
Company's effective tax rate was 31.2% in the third quarter and first nine
months of 1999 as compared to 32.0% for the same periods in 1998. This decrease
was a result of changes in anticipated differences between income for financial
statement purposes and taxable income for the periods.
6
<PAGE> 7
DALLAS SEMICONDUCTOR CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Actual results could differ materially from those projected in the
forward-looking statements as a result of the factors set forth elsewhere in
this report. Although the Company believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, there can
be no assurance that such expectations will be achieved.
RESULTS OF OPERATIONS
Net sales for the third quarter of 1999 were $101,572,000, an increase of 22%
over the third quarter of 1998. The Company's revenue by product category is
shown in the table below.
NET SALES
(In millions)
<TABLE>
<CAPTION>
Change
Product Categories Q398 Q498 Q199 Q299 Q399 Q399-Q398
----- ----- ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
Communications $23.1 $22.6 $23.6 $24.7 $26.1 13%
Timekeeping 13.2 15.2 15.2 17.2 17.7 34%
System Extension 12.7 11.6 14.7 14.9 17.3 36%
Automatic Information 11.7 12.6 12.0 14.0 16.2 38%
Others 7.4 8.6 8.7 8.8 9.4 27%
Nonvolatile RAM 8.6 8.5 6.7 7.2 8.5 -1%
Microcontrollers 6.4 5.9 7.7 7.2 6.4 0%
----- ----- ----- ----- ----- --
Company Total $83.1 $85.0 $88.6 $94.0 $101.6 22%
----- ----- ----- ----- ----- --
</TABLE>
Gross margins decreased for the first nine months of 1999 to 51.9% from 52.5%
during the same period in 1998. Gross margins decreased in the third quarter of
1999 to 51.8% from 52.5% in the third quarter of 1998. The decrease in gross
margins for both periods was caused by slightly higher wafer costs due to lower
wafer production for the first nine months of 1999 as compared to the same
period in 1998. Gross margins also decreased due to costs associated with making
a logistics center operational in the Philippines.
Research and development ("R&D") expenses for the third quarter of 1999
increased 12% from the third quarter of 1998. R&D expenses increased 3% for the
first nine months of 1999 over the same period in 1998, primarily a result of
increased personnel costs due to increased headcount. R&D expenses as a percent
of sales decreased to 12.6% from 13.8% for the third quarter of 1999 and 1998,
respectively. R&D expenses as a percent of net sales decreased to 13.0% for the
first nine months of 1999 from 13.9% during the same period in 1998. This was
primarily due to higher sales volume.
Selling, general, and administrative ("SG&A") expenses increased 15.9% and 4.2%
for the third quarter of 1999 and the first nine months of 1999 over the same
periods in 1998, respectively. The increase in SG&A expenses resulted primarily
from increases in personnel costs due to increased headcount. SG&A expenses as a
percent of net sales was 15.6% and 15.7% for the three and nine month periods
ended October 3, 1999 as compared to 16.5% and 16.7% for the same periods ended
September 27, 1998.
7
<PAGE> 8
DALLAS SEMICONDUCTOR CORPORATION
RESULTS OF OPERATIONS (CONTINUED)
Operating income increased 29% and 16.6% for the third quarter of 1999 and the
first nine months of 1999 over the same periods in 1998, respectively. Increased
sales and relatively stable gross margins and operating expenses, produced
higher operating income in both periods. Operating income as a percent of sales
increased to 23.2% from 22% for the first nine months of 1999 and 1998,
respectively.
Net interest income for the third quarter of 1999 increased by $611,000 or 54%
over the third quarter of 1998. Net interest income increased by $1,464,000 or
41% for the first nine months of 1999 over the same period in 1998. Changes in
net interest income are due primarily to changes in the average cash balances
for the three and nine month periods. Any substantial change in the Company's
cash and short-term investments and changes in interest rates will continue to
effect net interest income.
The provision for income taxes includes estimated federal and state income taxes
at statutory rates and a deferred tax benefit for the three and nine month
periods ended October 3, 1999 of $1,937,000 and $3,311,000, respectively. The
Company's effective tax rate was 31.2% in the third quarter and first nine
months of 1999 as compared to 32.0% for the same periods in 1998. This decrease
was a result of changes in anticipated differences between income for financial
statement purposes and taxable income for the periods.
A number of uncertainties exist that may influence the Company's future
operating results, including general economic conditions, changes in conditions
affecting original equipment manufacturers, competition, alternative
technologies, the Company's success in developing new products and process
technologies, accelerated declines in the average selling price of the Company's
existing products, changes in customer order patterns, market acceptance of the
Company's new products, distributor and sales representative performance, the
ability of the Company to continue diversifying its product line, accelerated
growth of inventory leading to excess inventory and salability and/or
obsolescence write-downs, excess production capacity, manufacturing performance,
subcontractor performance, availability and price fluctuations of raw materials,
and other factors. Any of these uncertainties could cause a severe near-term
impact on the Company's order growth, net sales growth, or results of
operations.
8
<PAGE> 9
DALLAS SEMICONDUCTOR CORPORATION
FINANCIAL CONDITION
Cash and short-term investments were $177.6 million at the end of the third
quarter of 1999, compared with $128.0 million at the end of fiscal year 1998.
The increase in cash and short-term investments was primarily the result of net
cash provided by operations during the first nine months of 1999 of $95.5
million being offset by investments in property, plant and equipment of $39.9
million. The Company continues to invest in financial instruments having
maturities in excess of one year in order to obtain yields higher than those
available in the short-term market.
Capital additions were $15 million in the third quarter of 1999, compared to $21
million for the same period of 1998. Capital expenditures for the third quarter
of 1999 related primarily to wafer fabrication and test equipment. Capital
expenditures for 1999 are estimated to total approximately $68 million and will
be used primarily for wafer fabrication, manufacturing and test equipment, and
computer hardware and software. Included in estimated capital expenditures for
fiscal 1999 is equipment and facilities for Dallas Semiconductor Philippines,
Inc. (DSPI), a wholly owned subsidiary formed in March 1999. DSPI provides
technical support to, and coordinates Philippine based subcontractors for,
integrated circuit assembly, testing and module assembly for certain products.
During the third quarter of 1999, these subcontractors accounted for
approximately 30% of the Company's module assembly and 20% of the units tested.
Previously, these functions were performed at the Company's facilities in
Dallas, Texas.
As amended in 1998, the Board of Directors authorized the purchase from
time-to-time, depending on market conditions, of up to 1,000,000 shares of the
Company's common stock. As of October 3, 1999, a total of 459,068 shares,
totaling $13,570,000 have been purchased under this stock repurchase program.
On September 1, 1999, a $0.05 dividend was paid on each outstanding share of
common stock, to shareholders of record on August 13, 1999. On October 26, 1999,
a $0.05 dividend was declared on each outstanding share of common stock, payable
on December 1, 1999, to shareholders of record on November 15, 1999.
9
<PAGE> 10
DALLAS SEMICONDUCTOR CORPORATION
PART II. OTHER INFORMATION
ITEMS 1.- 4. Not Applicable.
ITEM 5. OTHER INFORMATION
YEAR 2000 READINESS DISCLOSURE
In response to the "Year 2000 Information and Readiness Disclosure Act"
signed into law October 19, 1998 and the statement issued by the Securities
and Exchange Commission regarding "Disclosure of Year 2000 Issues and
Consequences by Public Companies, Investment Advisers, Investment Companies,
and Municipal Security Holders" in August 1998, the Company is making the
following Year 2000 Readiness Disclosure.
The Company has undertaken an assessment of all mission critical systems,
including information systems as well as production and manufacturing
systems, which could be significantly affected by Year 2000 issues. The
Company has initiated various Year 2000 remediation projects, some of which
include the use of software purchased from third parties. Some of this third
party provided software was modified by the Company to be compatible with
its internal systems. The Company has already begun testing and implementing
these remediation projects and is substantially complete as of October 3,
1999. Similarly, certain hardware, primarily used in production and
manufacturing systems, is being replaced in a systematic manner. Replacement
of this hardware was originally scheduled due to anticipated obsolescence
and is substantially complete as of October 3, 1999. Also, as of this date,
the Company has incurred approximately $200,000 in Year 2000 remediation
costs and expects to incur approximately $25,000 in remaining costs to
ensure functionality for Year 2000 issues. The Company has not specifically
set aside funds to cover the remaining Year 2000 costs, but has adequate
resources to cover these needs as they arise.
None of the Company's systems interface directly with its third party
vendors. Also, the Company does not currently utilize electronic data
interchange (EDI) with any date sensitivity. In addition, the Company is
formally communicating by mailing letters to all of its significant third
party vendors (both domestic and international), requesting certifications
and test results to confirm their Year 2000 compliance. Where responses are
not obtained by letter, the Company is in the process of or shall follow up
to obtain this information in an effort to limit the extent to which the
Company may be vulnerable to the failure of third parties to remediate their
own Year 2000 issues. The Company also intends to mitigate this risk by
ceasing to do business with such companies as soon as feasible after it
becomes aware of any significant problems.
The Company has two principal product lines containing products that are
date sensitive, Timekeeping and Microcontrollers.
Timekeeping Products (Clocks) made by the Company fall into two categories:
o Clocks that are Year 2000 compatible
o Clocks that are Year 2000 compliant.
Clocks that are Year 2000 compatible have a two-digit year counter. They
will maintain the correct time, date of the month, day of the week, month
and two-digit year with correct leap year compensation up to year 2099. The
two-digit year counter does not provide the century information; therefore
software intervention is required to determine if the century value is 19 or
20.
10
<PAGE> 11
DALLAS SEMICONDUCTOR CORPORATION
The following Clocks are Year 2000 compatible, requiring software
intervention to calculate the century: DS1202, DS1215, DS1216, DS1243,
DS1244, DS1248, DS1251, DS1283, DS1284, DS1285, DS1286, DS1287, DS12885,
DS12887, DS12887A, DS12B887, DS1302, DS1305, DS1306, DS1307, DS1308, DS1315,
DS1384, DS1385, DS1386, DS1387, DS1395, DS1397, DS14285, DS14287, DS1485,
DS1486, DS1488, DS1495, DS1497, DS1543, DS1544, DS1546, DS1547, DS1615,
DS1642, DS1643, DS1644, DS1646, DS1647, DS1670, and DS1673.
The Clocks that are Year 2000 compliant have a four-digit year counter. The
fully compliant clocks will maintain the correct time, date of the month,
day of the week, month and four-digit year with correct leap year
compensation up to year 2099.
The following Clocks are fully Year 2000 compliant: DS12C887, DS1501,
DS1511, DS1553, DS1554, DS1546, DS1557, DS1585, DS1587, DS1589, DS1685,
DS1687, DS1688, DS1689, DS1691, DS1693, Ds17285, DS17287, DS1742, DS1743,
DS1744, DS1746, DS1747, DS17485, DS17487, DS17885, and DS17887.
Microcontroller Products use one of three real-time clock circuits and fall
into one of two categories, compatible or compliant, as described above.
DS 1215-based Soft Microcontroller Modules: DS5000T and DS2250T.
The DS1215 is Year 2000 compatible, as it stores the year as a two-digit
value. The two-digit year counter does not provide the century
information; therefore software intervention is required to determine if
the century value is 19 or 20.
DS1283-based Soft Microcontroller Modules: DS2251T and DS22522T.
The DS1283 is Year 2000 compatible, as it stores the year as a two-digit
value. The two-digit year counter does not provide the century
information; therefore software intervention is required to determine if
the century value is 19 or 20.
DS87C530 and DS5240 High Speed Microcontrollers with Real Time Clock.
The Clock in these microcontrollers consists of a 16 bit day counter,
rather than a traditional day/month/year calendar, for maximum
flexibility. As a result, the device can be totally Year 2000 compatible
via application software.
The following are other Dallas Semiconductor products that are date
sensitive:
The DS2404, DS1994, DS1427, DS1921 and DS2417, members of the Company's
Automatic Identification product category, contain simple binary counters
and require software intervention to interpret this raw data to be Year
2000 compliant.
The DS1629, a member of the Company's System Extension product category,
incorporates a DS1307 real-time clock that has a two-digit year counter.
The two-digit year counter does not provide the century information;
therefore software intervention is required to determine if the century
value is 19 or 20.
11
<PAGE> 12
DALLAS SEMICONDUCTOR CORPORATION
All of the Company's products require the utilization of software programs
for the products to be of use to the end user. The Company does not
recommend or provide software for use in conjunction with any application
for the products it manufactures, including software solutions to Year 2000
issues. However, to the extent practicable, purchasers of our Year 2000
compatible products (which require software intervention) have been put on
notice, via data books and web page postings, of the need for such software
intervention prior to purchasing such products and further have been made
aware of available Year 2000 alternatives (compliant products not requiring
software intervention) manufactured by the Company. Although the Company
does not believe it has any liability related to Year 2000 compatible
products (those which require software intervention), there is a risk of
litigation associated with the manufacture and sale of these products.
Management of the Company believes it has an effective program in place to
resolve Year 2000 issues and expects all critical remediation projects will
be completed on schedule. As a result of its focus on ensuring the
remediation projects are on schedule, the Company has not developed a
contingency plan to address alternative solutions in the event the Company
is unable to successfully make its critical systems Year 2000 compliant.
However, the Company continually evaluates its status towards completion to
determine whether such a plan is necessary. At this point, the Company is on
schedule and no contingency plan is deemed necessary. Additionally, the
Company has no means of ensuring that third parties, including those based
outside of the United States, will be Year 2000 compliant and the effect of
non-compliance by third parties is not determinable. In a worst case
scenario, these unknown third party variables could have an effect on the
Company's ability to conduct business. This worst case scenario, however, is
a risk of any company engaging in world-wide business into the next
millennium. To date, the Company is not aware of any third party with a Year
2000 issue that would materially impact the Company's results of operations,
liquidity, or capital resources. In addition, the Company is not currently
aware of any claims of breach of contract or warranty, potential product
return issues or impairment of assets relating to Year 2000 noncompliance
that would materially impact the Company's results of operations, liquidity,
or capital resources.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on September 20, 1999
reporting, under Item 5-Other Events and Item 7-Exhibits, the
Shareholders' Rights Agreement (the "Agreement") dated September
10, 1999 between the Company and CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Rights Agent. The Agreement provides for the
declaration of a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value
$.02 per share, of the Company (the "Common Stock"), payable on
September 21, 1999, to the stockholders of record on that date.
Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value at $.10 per share, of
the Company (the "Preferred Stock") at a price of $250 per one
one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Agreement, as the same may be amended
from time to time.
12
<PAGE> 13
DALLAS SEMICONDUCTOR CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DALLAS SEMICONDUCTOR CORPORATION
By: /s/ Alan P. Hale
----------------
Alan P. Hale
Vice President, Finance
Date: November 14, 1999
-----------------
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27.1 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-END> OCT-03-1999
<CASH> 177,590
<SECURITIES> 0
<RECEIVABLES> 52,193
<ALLOWANCES> 0
<INVENTORY> 74,707
<CURRENT-ASSETS> 327,046
<PP&E> 436,810
<DEPRECIATION> 242,824
<TOTAL-ASSETS> 528,004
<CURRENT-LIABILITIES> 56,530
<BONDS> 0
0
0
<COMMON> 588
<OTHER-SE> 471,474
<TOTAL-LIABILITY-AND-EQUITY> 528,004
<SALES> 101,572
<TOTAL-REVENUES> 284,147
<CGS> 136,600
<TOTAL-COSTS> 218,139
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 71,035
<INCOME-TAX> 22,163
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,872
<EPS-BASIC> 1.70
<EPS-DILUTED> 1.59
</TABLE>
