-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fxYqDFL2uoitB5KSKpbrYyOjKtV1S0+jdvfcxEPlmrtFggNq+QsC5tb7DccUc54i rRkvSkSzKKX37hZLZQpGpw== 0000749420-94-000004.txt : 19941117 0000749420-94-000004.hdr.sgml : 19941117 ACCESSION NUMBER: 0000749420-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941115 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALLAS SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0000749420 STANDARD INDUSTRIAL CLASSIFICATION: 3674 IRS NUMBER: 751935715 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10464 FILM NUMBER: 94560643 BUSINESS ADDRESS: STREET 1: 4401 S BELTWOOD PKWY CITY: DALLAS STATE: TX ZIP: 75244-3292 BUSINESS PHONE: 2144500400 MAIL ADDRESS: STREET 2: 4401 S BELTWOOD PKWY CITY: DALLAS STATE: TX ZIP: 75244-3292 10-Q 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 2, 1994 --------------- 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: (214) 450-0400 -------------- 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 October 2, 1994: 25,494,161. ---------- 2 DALLAS SEMICONDUCTOR CORPORATION INDEX TO FORM 10-Q PART I. FINANCIAL INFORMATION - ------- --------------------- Item 1. FINANCIAL STATEMENTS Page No. - ------- ------------------------------------------------------ -------- Condensed Consolidated Statements of Income (Unaudited) Three and nine months ended October 2, 1994 and October 3, 1993 ......3 Condensed Consolidated Balance Sheets October 2, 1994 (Unaudited) and January 2, 1994.......................4 Condensed Consolidated Statements of Cash Flows (Unaudited) Nine months ended October 2, 1994 and October 3, 1993 ................5 Notes to Condensed Consolidated Financial Statements ............. 6 - 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF - ------- ---------------------------------------- FINANCIAL CONDIDTION AND RESULTS OF OPERATIONS ...... 8 - 10 ---------------------------------------------- PART II. OTHER INFORMATION - -------- ------------------ Items 1. through 6. ................................................. 11 - ------------------ SIGNATURE ............................................................ 12 - --------- 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ------- --------------------- DALLAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended Nine months ended ------------------- ----------------- Oct. 2, Oct. 3, Oct. 2, Oct. 3, (Thousands except per share amounts) 1994 1993 1994 1993 - ------------------------------------ ------- ------- -------- -------- Net sales $45,201 $41,008 $133,425 $114,857 Operating costs and expenses: Cost of sales 22,556 20,420 66,248 57,181 Research and development 5,663 4,919 16,536 14,371 Selling, general and administrative 6,596 5,893 19,456 16,528 ------- ------- -------- -------- Total 34,815 31,232 102,240 88,080 ------- ------- -------- -------- Operating income 10,386 9,776 31,185 26,777 Interest income, net 776 715 2,446 2,071 ------- ------- -------- -------- Income before income taxes 11,162 10,491 33,631 28,848 Provision for income taxes 3,795 3,672 11,435 10,280 ------- ------- -------- -------- Net income $ 7,367 $ 6,819 $ 22,196 $ 18,568 ======= ======= ======== ======== Net income per share $ .27 $ .25 $ .81 $ .69 ======= ======= ======== ======== Weighted average common and common equivalent shares outstanding 27,231 27,225 27,391 26,913 ======= ======= ======== ======== See accompanying notes. 4 DALLAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS Oct. 2, Jan. 2, (Dollars in thousands except per share amounts) 1994 1994 - ----------------------------------------------- --------- --------- (unaudited) Assets Current assets: Cash and cash equivalents $ 3,615 $ 12,012 Short-term cash investments 6,047 20,303 Accounts receivable, net 28,077 23,351 Inventories 35,969 30,605 Deferred tax assets 3,725 2,366 Other current assets 2,751 2,551 -------- -------- Total current assets 80,184 91,188 Property, plant and equipment, at cost: Land 5,400 4,219 Building and improvements 27,921 19,480 Machinery and equipment 125,647 95,791 -------- -------- 158,968 119,490 Less accumulated depreciation (80,743) (70,099) -------- -------- Property, plant and equipment, net 78,225 49,391 Cash investments (municipal bonds, U.S. government agency obligations and corporate notes and bonds) 52,624 43,958 Other assets 2,799 2,007 -------- -------- $213,832 $186,544 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 14,155 $ 9,508 Accrued salaries and benefits 4,593 5,058 Accrued taxes other than income 1,695 1,862 Other accrued liabilities 2,111 2,011 Income taxes payable 2,541 2,567 -------- -------- Total current liabilities 25,095 21,006 Commitments 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: 25,525,161 shares at October 2, 1994, and 25,358,679 shares at January 2, 1994 511 507 Additional paid-in capital 80,298 78,817 Retained earnings 108,410 86,214 Treasury stock, 31,000 shares at cost (482) -- --------- -------- Total stockholders' equity 188,737 165,538 --------- -------- $213,832 $186,544 ========= ======== Total cash, cash equivalents and cash investments $ 62,286 $ 76,273 ======== ======== See accompanying notes. 5 DALLAS SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended ---------------------- Oct. 2, Oct. 3, (Thousands) 1994 1993 - -------------------------------------------- -------- -------- Cash flows from operating activities: Net income $ 22,196 $ 18,568 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,644 10,273 Deferred tax benefit (1,359) (874) Increase in receivables (4,726) (7,018) Increase in inventories (5,364) (3,511) (Increase) decrease in other current assets (200) 108 Increase (decrease) in accounts payable 4,647 (1,789) Decrease in accrued salaries and benefits (465) (488) Decrease in accrued taxes other than income (167) (36) Increase in other accrued liabilities 100 47 Increase in income taxes payable 656 726 -------- -------- Net cash provided by operating activities 25,962 16,006 --------- -------- Cash flows from investing activities: Purchases of cash investments (32,321) (24,607) Proceeds from sales and maturities of cash investments 37,911 16,537 Additions to property, plant and equipment (39,478) (16,313) Increase in other assets (792) (98) -------- -------- Net cash used by investing activities (34,680) (24,481) -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock upon exercise of stock options 803 1,862 Purchase of treasury stock (482) -- -------- -------- Net cash provided by financing activities 321 1,862 -------- -------- Net decrease in cash and cash equivalents (8,397) (6,613) Cash and cash equivalents at beginning of period 12,012 9,270 -------- -------- Cash and cash equivalents at end of period $ 3,615 $ 2,657 ======== ======== Cash payments for: Interest $ 1 $ 132 Income taxes $ 12,141 $ 10,329 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 $ 682 $ 1,412 See accompanying notes. 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 2, 1994. 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 2, 1994 and January 2, 1994,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 1993 Annual Report, which statements and notes were incorporated by reference in the Company's Annual Report on Form 10-K for the year ended January 2, 1994. Results of operations for the three and nine months ended October 2, 1994 are not necessarily indicative of results to be expected for the full year. Certain amounts have been reclassified to conform to the current period presentation. The difference between primary and fully diluted net income per share was not material in any period. Oct. 2, Jan. 2, 2. INVENTORIES (in thousands) 1994 1994 -------- --------- Raw materials $ 5,065 $ 3,910 Work-in-process 19,100 17,937 Finished goods 11,804 8,758 -------- -------- $ 35,969 $ 30,605 ======== ======== Inventories are stated at the lower of standard cost, which approximates actual cost (first-in, first-out), or market. 7 DALLAS SEMICONDUCTOR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 months ended October 2, 1994 of $626,000 and $1,359,000, respectively. The Company's effective tax rate was 34% in the three and nine month period ended October 2,1994, decreasing from 35% and 36% for the same periods in 1993, respectively. This decrease was a result of changes in anticipated differences between income for financial statement purposes and taxable income for the periods, partially offset by the enactment of the 1993 Omnibus Budget Reconciliation Act. 8 DALLAS SEMICONDUCTOR CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATI0NS - --------------------- Net sales for the third quarter of 1994 were $45,201,000, an increase of 10% over the third quarter of 1993. Net sales for the first nine months of 1994 were $133,425,000, an increase of 16% over the same period in 1993. The Company's revenue growth for both periods was supported by increased unit sales of new and existing products in several product families including System Extension, Automatic Identification, Telecommunications, Microcontroller, and other product families. Gross margins remained constant at 50% for the third quarter and first nine months of 1994 and 1993. Research and development ("R&D") expenses for the third quarter and first nine months of 1994 increased 15% over the same periods in 1993. The increase in both periods resulted primarily from increased personnel costs. R&D expenses as a percent of net sales increased to 13% from 12% for the three month periods ended October 2, 1994 and October 3, 1993, respectively. R&D expenses decreased to 12% from 13% for the nine month periods ended October 2, 1994 and October 3, 1993, respectively. Selling, general and administrative ("SG&A") expenses for the third quarter of 1994 increased 12% compared with the third quarter of 1993. In the first nine months of 1994, SG&A expenses increased 18% from the same period of 1993. SG&A expenses as a percent of net sales increased to 15% from 14% for the three and nine month periods ended October 2, 1994 and October 3, 1993, respectively. The increase in SG&A expenses in the third quarter resulted primarily from increased personnel costs and higher commissions on increased sales. Operating income increased 6% and 16% for the third quarter and first nine months of 1994 over the same periods in 1993, respectively. Operating income as a percent of net sales decreased to 23% from 24% for the third quarters of 1994 and 1993, respectively. Operating income as a percent of net sales remained constant at 23% for the first nine months of 1994 and 1993. Net interest income for the third quarter and first nine months of 1994 increased by $61,000 and $375,000 over the same periods of 1993, respectively. Higher average cash balances more than offset lower 9 interest rates. Changes in interest rates will continue to affect net interest income as will any substantial change in the Company's cash, cash equivalents and cash investments or any substantial change in borrowings. 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 2, 1994 of $626,000 and $1,359,000, respectively. The Company's effective tax rate was 34% in the three and nine month period ended October 2, 1994 decreasing from 35% and 36% for the same periods in 1993, respectively. This decrease was a result of changes in anticipated differences between income for financial statement purposes and taxable income for the two periods, partially offset by the enactment of the 1993 Omnibus Budget Reconciliation Act in August, 1993. 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 (including alternative technologies), the Company's success in developing new products and process technologies, market acceptance of the Company's new products, the ability of the Company to continue diversifying its product line, manufacturing performance, availability and price fluctuations of raw materials, and other factors. FINANCIAL CONDITION - ------------------- Cash, cash equivalents and cash investments were $62.3 million at the end of the third quarter of 1994, compared with $76.3 million at the end of fiscal year 1993. The decrease in cash, cash equivalents and cash investments was primarily the result of cash used for additions to property, plant and equipment. The Company continued investing in financial instruments having maturities in excess of one year in order to obtain yields higher than those available in the short-term market. Gross capital additions were $39.5 million for the first nine months of 1994, compared with $16.3 million in the same period of 1993. Capital additions in the first nine months of 1994 include $19.9 million in capital expenditures related to the Company's wafer fabrication ("fab") expansion project and the Company's January 1994 $2.4 million purchase of four buildings adjacent to its facilities in Dallas. The Company anticipates that the majority of capital additions during 1994, in addition to the building purchases, will be for fab and test equipment, and computer hardware and 10 software. Capital additions of approximately $6.0 million are anticipated for the remainder of 1994 of which $1.0 million relate to fab equipment purchases expected for the Company's fab expansion project. The fab expansion project began its initial alignment of wafers on June 6, 1994 and effectively began producing wafers in support of the Company's production plans after the end of the third quarter. The total cost of the expansion project is estimated at $25.4 million (composed of $4.5 million incurred in 1993, $19.9 million in the first nine months of 1994, and $1.0 million estimated for the remainder of 1994), and will initially increase the Company's wafer fabrication capacity by approximately 20%. The Company was authorized by the board of directors in August 1994 to make use of some of its cash reserves to purchase from time-to-time, depending on market conditions, up to 500,000 shares of its common stock. As of October 2, 1994, a total of 31,000 shares, totalling $482,000 have been purchased pursuant to this stock repurchase program. The Company had no long-term debt at the end of the third quarter of 1994 or 1993. 11 DALLAS SEMICONDUCTOR CORPORATION PART II. OTHER INFORMATION - -------------------------- Items 1.- 5. - ------------ Not applicable. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibit 27 - Financial Data Schedule ------------------------------------ None. (b) Reports on Form 8-K ------------------- No Reports on Form 8-K were filed during the period for which this report is filed. 12 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 16, 1994 ----------------- EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS JAN-1-1995 OCT-02-1994 3,615 58,671 28,077 0 35,969 80,184 158,968 80,743 213,832 25,095 0 511 0 0 188,226 213,832 133,425 133,425 66,248 102,240 0 0 0 33,631 11,435 0 0 0 0 22,196 .81 0
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