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Kierulff Gets Franchise for National Semiconductor

March 03, 1987|LILY ENG | Times Staff Writer

In a move that could boost its annual revenue by $40 million or more, Kierulff Electronics Inc. has signed an agreement with National Semiconductor Corp. to distribute National's products throughout the country.

Kierulff is the electronic components distribution arm of Cypress-based Ducommun Inc.

National Semiconductor, based in Santa Clara, manufactures semiconductors devices used in products such as microprocessors, logic devices, and telecommunication equipment.

Under the franchise agreement, National Semiconductor will sell products to Kierulff, which in turn will market the components from 30 locations.

Spokesmen from both companies refused to discuss how much the franchise is worth.

But industry analysts say the agreement is beneficial to Kierulff, which has been trying to gain more franchises since it ended a $20-million distribution agreement with Motorola Inc. last October. The Motorola franchise ends next month.

Largest Franchise

Although Kierulff has added four other franchises since October, National Semiconductor is by far the largest, manufacturing more than 5,000 semiconductor products for customers that include major commercial and military industries.

The new franchise picks up the slack left after Kierulff and Motorola agreed to end their contract, said analyst Richard O. Rieger of Landenburg Thalmann & Co.

But the pact is not likely to have an immediate impact on Ducommun stock, said Clarke L. Walser, a Chicago Corp. analyst.

"The agreement cannot be measured immediately. The ultimate effect will develop over time when Kierulff builds its inventory, learns more about the technical details of the products and markets them," Walser said. The semiconductor market has been "highly competitive" for several years because of declining prices, Walser said. "The manufacturing companies and marketers are scrambling to build sales back up."

Kierulff President Donald Bell said the National Semiconductor franchise should boost sales by $15 million for fiscal 1987 and by $40 million in the company's fiscal 1988. Ducommun's revenues for its fiscal 1987, ending May 31, will be about $450 million, of which Kierulff's sales account for 80%--or about $380 million--Bell said.

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