- Q1 sales were $314 million, up 12% from Q4 of fiscal 2009 and down 32% from Q1 of fiscal 2009 - Gross margin percentage of 61.1%, up from 58.3% in Q4 and down from 66.0% in last year's Q1 - Bookings were up 17% over Q4 - Sales outlook for Q2 of fiscal 2010 expected to increase 3 to 8 percent sequentially
SANTA CLARA, Calif., Sept. 10 /PRNewswire-FirstCall/ -- National Semiconductor Corp. (NYSE: NSM) today reported sales of $314 million and net income of $29.8 million, or 13 cents per diluted share, for the first quarter of fiscal 2010, which ended Aug. 30, 2009.
National's first quarter sales were 12 percent higher than sales in the fourth quarter of fiscal 2009, when the company reported $281 million in sales, but lower than the $466 million reported in last year's first fiscal quarter. The sequential improvement in National's first quarter sales was driven by increased demand for the company's energy-efficient analog products, especially from distributors serving broad industrial markets. Net income of $29.8 million, or 13 cents per diluted share, was an increase from the net loss of $64 million and net loss of 28 cents per share in the fourth quarter of fiscal 2009. Fourth quarter fiscal 2009 results included $116 million of pre-tax charges related to restructuring expenses.
Gross margin of 61.1 percent in National's first quarter was up from the 58.3 percent gross margin achieved in the fourth quarter of fiscal 2009 but down from the record-high 66.0 percent gross margin reported in the first quarter of fiscal 2009. Sequential gross margin improvement in the first quarter was due to improved product mix, higher production volume and benefits realized from sooner-than-expected ceasing of production at National's assembly and test facility in Suzhou, China.
Bookings for Q1, Fiscal 2010
National's total company bookings in the first quarter increased by approximately 17 percent sequentially over the fourth quarter. The increase in overall bookings was driven by higher order rates in North America, Europe and Japan. Total company bookings exceeded billings in the first quarter.
Notable Items in Q1, Fiscal 2010 Results
First quarter results included approximately $6 million in pre-tax restructuring charges related to the phased closure of National's manufacturing facilities in Arlington, Texas and Suzhou, China, consistent with expectations.
Outlook for Q2, Fiscal 2010
National anticipates that sales in the second quarter of fiscal 2010 will increase approximately 3 percent to 8 percent sequentially, or a range of approximately $325 million to $340 million.
"Demand was better than we expected, especially for our power management products going into broad industrial applications," said Brian L. Halla, National's chairman and CEO. "As a result, we were able to get our gross margins back above 60 percent."
Company Declares Dividend
The company announced today that the Board of Directors has declared a cash dividend of $0.08 per outstanding share of common stock. This dividend will be paid on Oct. 12, 2009 to shareholders of record at the close of business on Sept. 21, 2009.
Special Note
This release contains forward-looking statements dependent on a number of risks and uncertainties pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Except for historical information contained herein, the matters set forth in this press release, including management's expectations regarding future performance, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks and uncertainties include, but are not restricted to, such factors as new orders received and shipped during the quarter, the degree of factory utilization, the sale of inventories at existing prices, and the ramp up and sale of new analog products. Other risk factors are included in the company's Annual Report on Form 10-K for the fiscal year ended May 31, 2009 under the captions "Outlook," "Risk Factors" and "Management's Discussion and Analysis of Financial Conditions and Results of Operations" contained therein.
About National Semiconductor
National Semiconductor is a leader in analog power management technology. Its products include easy-to-use integrated circuits, PowerWise products that enable more energy-efficient systems, and SolarMagic products which improve the energy output of solar arrays. The company celebrates its 50th anniversary this year. Headquartered in Santa Clara, Calif., National reported sales of $1.46 billion for fiscal 2009. Additional information is available at www.national.com.
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share amounts)
Three Months Ended
------------------
Aug. 30, Aug. 24,
2009 2008
-------- --------
Net sales $314.4 $465.6
Cost of sales 122.2 158.4
------ ------
Gross margin 192.2 307.2
Research and development 65.3 89.6
Selling, general and administrative 73.0 81.8
Severance and restructuring expenses 5.7 1.1
Other operating income, net (2.0) (0.1)
------ ------
Operating expenses 142.0 172.4
------ ------
Operating income 50.2 134.8
Interest income 0.5 3.8
Interest expense (15.7) (18.3)
Other non-operating income (expense), net 3.3 (2.8)
------ ------
Income before taxes 38.3 117.5
Income tax expense 8.5 37.9
------ ------
Net income $29.8 $79.6
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Earnings per share:
Basic $0.13 $0.35
Diluted $0.13 $0.33
Selected income statement ratios as a
percentage of sales:
Gross margin 61.1% 66.0%
Research and development 20.8% 19.2%
Selling, general and administrative 23.2% 17.6%
Net income 9.5% 17.1%
Effective tax rate 22.2% 32.3%
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)
Aug. 30, May 31,
2009 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $734.1 $700.3
Receivables 84.3 71.7
Inventories 123.0 134.6
Deferred tax assets 73.0 72.6
Other current assets 138.0 108.0
----- -----
Total current assets 1,152.4 1,087.2
Net property, plant and
equipment 425.8 461.8
Goodwill 61.5 61.5
Deferred tax assets, net 253.9 251.5
Other assets 97.9 101.3
----- -----
Total assets $1,991.5 $1,963.3
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LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt $312.5 $62.5
Accounts payable 47.3 40.3
Accrued expenses 129.8 144.6
Income taxes payable 7.4 28.2
----- ----
Total current liabilities 497.0 275.6
Long-term debt 962.9 1,227.4
Long-term income taxes
payable 167.2 162.6
Other non-current
liabilities 122.5 120.7
----- -----
Total liabilities 1,749.6 1,786.3
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Commitments and
contingencies
Shareholders' equity:
Common stock of $0.50 par
value 118.3 116.3
Additional paid-in-capital 119.4 67.6
Retained earnings 127.9 116.8
Accumulated other
comprehensive loss (123.7) (123.7)
----- ------
Total shareholders' equity 241.9 177.0
----- -----
Total liabilities and
shareholders' equity $1,991.5 $1,963.3
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NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Three Months Ended
------------------
Aug. 30, Aug. 24,
2009 2008
---- ----
Cash flows from operating activities:
Net income $29.8 $79.6
Adjustments to reconcile net income with net cash
provided by
operating activities:
Depreciation and amortization 25.0 31.2
Share-based compensation 13.8 19.4
Excess tax benefit from share-based payment
arrangements (0.1) (4.1)
Tax (expense) benefit associated with stock options (2.5) 6.2
(Gain) loss on investments (3.3) 2.8
Loss (gain) on disposal of equipment 0.7 (0.4)
Other, net 0.9 (1.7)
Changes in certain assets and liabilities, net:
Receivables (14.4) (21.2)
Inventories 11.1 (0.3)
Other current assets (8.0) (8.7)
Accounts payable and accrued expenses (10.9) (39.4)
Current and deferred income taxes (18.8) 27.9
Other non-current liabilities 8.3 0.8
--- ---
Net cash provided by operating activities 31.6 92.1
---- ----
Cash flows from investing activities:
Purchase of property, plant and equipment (5.9) (22.3)
Funding of benefit plan (0.5) (4.3)
Redemption and net realized losses of benefit plan 1.4 1.1
Other, net (0.2) 0.6
----- ---
Net cash used in investing activities (5.2) (24.9)
----- -----
Cash flows from financing activities:
Repayment of bank borrowing (15.6) (15.6)
Payment on software license obligations (3.2) -
Excess tax benefit from share-based payment
arrangements 0.1 4.1
Minimum tax withholding paid on behalf of employees
for net share settlements (1.4) (0.1)
Issuance of common stock 46.2 19.2
Purchase and retirement of treasury stock - (105.1)
Cash dividends declared and paid (18.7) (14.0)
------ -----
Net cash provided by (used in) financing activities 7.4 (111.5)
--- ------
Net change in cash and cash equivalents 33.8 (44.3)
Cash and cash equivalents at beginning of period 700.3 736.8
----- -----
Cash and cash equivalents at end of period $734.1 $692.5
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PART I. FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(In millions, except per share amounts)
Three Months Ended
------------------
Aug. 30, Aug. 24,
2009 2008
---- ----
Earnings per share:
Basic $0.13 $0.35
Diluted $0.13 $0.33
Net income used in basic and diluted
earnings per share calculation $29.8 $79.6
Weighted-average shares outstanding:
Basic 233.6 229.8
Diluted 237.9 241.3
OTHER FINANCIAL STATEMENT DETAIL
(In millions)
Three Months Ended
------------------
Aug. 30, Aug. 24,
Other operating income, net 2009 2008
--------------------------- ---- ----
Net intellectual property income $ - $(0.1)
Litigation settlement (2.0) -
---- ---
Total other operating income, net $(2.0) $(0.1)
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Other non-operating income (expense), net
-----------------------------------------
Gain (loss) on investments $3.3 $(2.8)
---- ------
Total other non-operating income
(expense), net $3.3 $(2.8)
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