- Q2 sales of $345 million were up 10% from Q1 of fiscal 2010 and down 18% from Q2 of fiscal 2009 - Gross margin reached 65.3%, up from 61.1% in Q1 and down from 65.8% in last year's Q2 - GAAP earnings per share of 20 cents was up from 13 cents in Q1 and 16 cents in Q2 of fiscal 2009 - Bookings increased 17% over Q1 - Sales outlook for Q3 of fiscal 2010 expected to be approximately flat sequentially
SANTA CLARA, Calif., Dec. 10 /PRNewswire-FirstCall/ -- National Semiconductor Corp. (NYSE: NSM) today reported sales of $345 million and net income of $47.0 million, or 20 cents per diluted share, for the second quarter of fiscal 2010, which ended Nov. 29, 2009.
National's second quarter sales were 10 percent higher than the first quarter of fiscal 2010, when the company reported $314 million in sales, but lower than the $422 million reported in last year's second fiscal quarter. Sequential improvement in second quarter sales was driven mainly by increased demand in industrial markets, which are primarily served through distributors. Second quarter net income of $47.0 million, or 20 cents per diluted share, was an increase from the $29.8 million, or 13 cents per share in the first quarter of fiscal 2010. In last year's second quarter, National reported net income of $36.3 million, or 16 cents per share. Second quarter fiscal 2009 results included a pre-tax $28.1 million restructuring charge.
Gross margin of 65.3 percent in National's second quarter was an increase from the 61.1 percent gross margin achieved in the first quarter of fiscal 2010 and down from the 65.8 percent gross margin reported in the second quarter of fiscal 2009. Sequential gross margin improvement was due to a combination of a stronger product mix, higher sales volume and improved manufacturing cost performance, including some earlier-than-expected savings realized from wafer fab consolidation.
Bookings for Q2, Fiscal 2010
Driven primarily by higher order rates from distributors serving industrial markets in every major region, National's total company bookings increased 17 percent sequentially in the second quarter. Bookings exceeded billings in the quarter.
"New order rates for our analog products continued to improve each month through the second quarter, giving us a higher opening backlog for the new quarter," said Don Macleod, National's new chief executive officer. "Now that we have restored our gross margins back over the 65-percent threshold, we can put even more of our focus on revenue growth going forward."
Outlook for Q3, Fiscal 2010
Although the typical seasonal pattern is for third quarter revenues to decline sequentially, National is projecting revenues to be roughly flat in the third quarter of fiscal 2010.
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 Jan. 11, 2010 to shareholders of record at the close of business on Dec. 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 and the quarterly report on Form 10-Q for the quarter ended Aug. 30, 2009.
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 celebrated 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.
Media Contact: Financial: LuAnn Jenkins Mark Veeh National Semiconductor National Semiconductor (408) 721-2440 (408) 721-5007 luann.jenkins@nsc.com invest.group@nsc.com
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share amounts)
Three Months Six Months
Ended Ended
------------ ----------
Nov. 29, Nov. 23, Nov. 29, Nov. 23,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $344.6 $421.6 $659.0 $887.2
Cost of sales 119.6 144.2 241.8 302.6
----- ----- ----- -----
Gross margin 225.0 277.4 417.2 584.6
Research and development 68.2 91.6 133.5 181.2
Selling, general and
administrative 81.0 69.5 154.0 151.3
Severance and
restructuring expenses 0.7 28.1 6.4 29.2
Other operating expense
(income), net 1.1 (0.1) (0.9) (0.2)
--- ---- ---- ----
Operating expenses 151.0 189.1 293.0 361.5
----- ----- ----- -----
Operating income 74.0 88.3 124.2 223.1
Interest income 0.4 3.8 0.9 7.6
Interest expense (15.0) (18.7) (30.7) (37.0)
Other non-operating
income (expense), net 2.0 (12.3) 5.3 (15.1)
--- ----- --- -----
Income before taxes 61.4 61.1 99.7 178.6
Income tax expense 14.4 24.8 22.9 62.7
---- ---- ---- ----
Net income $47.0 $36.3 $76.8 $115.9
===== ===== ===== ======
Earnings per share:
Basic $0.20 $0.16 $0.33 $0.51
Diluted $0.20 $0.16 $0.32 $0.49
Selected income statement
ratios as a
percentage of sales:
Gross margin 65.3% 65.8% 63.3% 65.9%
Research and development 19.8% 21.7% 20.3% 20.4%
Selling, general and
administrative 23.5% 16.5% 23.4% 17.1%
Net income 13.6% 8.6% 11.7% 13.1%
Effective tax rate 23.5% 40.6% 23.0% 35.1%
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)
Nov. 29, May 31,
2009 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $821.7 $700.3
Receivables 87.6 71.7
Inventories 116.4 134.6
Deferred tax assets 73.0 72.6
Other current assets 135.5 108.0
----- -----
Total current assets 1,234.2 1,087.2
Net property, plant and
equipment 416.0 461.8
Goodwill 66.1 61.5
Deferred tax assets, net 256.7 251.5
Other assets 102.5 101.3
----- -----
Total assets $2,075.5 $1,963.3
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-
term debt $339.0 $62.5
Accounts payable 41.7 40.3
Accrued expenses 161.2 144.6
Income taxes payable 17.0 28.2
---- ----
Total current liabilities 558.9 275.6
Long-term debt 921.8 1,227.4
Long-term income taxes
payable 169.1 162.6
Other non-current
liabilities 129.5 120.7
----- -----
Total liabilities 1,779.3 1,786.3
------- -------
Commitments and
contingencies
Shareholders' equity:
Common stock of $0.50 par
value 118.9 116.3
Additional paid-in-capital 145.0 67.6
Retained earnings 156.0 116.8
Accumulated other
comprehensive loss (123.7) (123.7)
------ ------
Total shareholders' equity 296.2 177.0
----- -----
Total liabilities and
shareholders' equity $2,075.5 $1,963.3
======== ========
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Six Months
Ended
----------
Nov. 29, Nov. 23,
2009 2008
---- ----
Cash flows from operating activities:
Net income $76.8 $115.9
Adjustments to reconcile net income with net
cash provided by operating activities:
Depreciation and amortization 47.8 61.5
Share-based compensation 32.7 35.5
Excess tax benefit from share-based payment
arrangements (0.1) (4.3)
Tax (expense) benefit associated with stock
options (4.4) 6.5
(Gain) loss on investments (5.3) 15.1
Non-cash restructuring recovery (5.7) (0.1)
Loss (gain) on disposal of equipment 0.8 (0.5)
Other, net 1.2 0.4
Changes in certain assets and liabilities, net:
Receivables (17.5) 8.9
Inventories 17.9 (5.7)
Other current assets (5.0) 1.7
Accounts payable and accrued expenses 15.8 (4.9)
Current and deferred income taxes (10.7) 48.8
Other non-current liabilities 15.3 (24.8)
---- -----
Net cash provided by operating activities 159.6 254.0
----- -----
Cash flows from investing activities:
Purchase of property, plant and equipment (14.4) (55.1)
Proceeds from sale of property, plant and
equipment 0.1 0.6
Business acquisition, net of cash acquired (4.8) -
Funding of benefit plan (1.1) (5.5)
Redemption and net realized losses of benefit
plan 1.3 5.0
Other, net (1.4) -
---- ---
Net cash used in investing activities (20.3) (55.0)
----- -----
Cash flows from financing activities:
Repayment of bank borrowing (31.2) (31.4)
Payment on software license obligations (3.2) -
Excess tax benefit from share-based payment
arrangements 0.1 4.3
Minimum tax withholding paid on behalf of
employees for net share settlements (1.6) (0.2)
Issuance of common stock 56.7 33.5
Cash payments in connection with stock option
exchange program (1.1) -
Purchase and retirement of treasury stock - (128.4)
Cash dividends declared and paid (37.6) (27.7)
----- -----
Net cash used in financing activities (17.9) (149.9)
----- ------
Net change in cash and cash equivalents 121.4 49.1
Cash and cash equivalents at beginning of
period 700.3 736.8
----- -----
Cash and cash equivalents at end of period $821.7 $785.9
====== ======
PART I. FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(In millions, except per share
amounts)
Three Months Six Months
Ended Ended
------------ ----------
Nov. 29, Nov. 23, Nov. 29, Nov. 23,
2009 2008 2009 2008
---- ---- ---- ----
Earnings per share:
Basic $0.20 $0.16 $0.33 $0.51
Diluted $0.20 $0.16 $0.32 $0.49
Net income used in
basic and diluted
earnings per share
calculation $47.0 $36.3 $76.8 $115.9
Weighted-average
shares outstanding:
Basic 236.6 228.0 235.1 228.9
Diluted 241.0 234.0 239.5 237.6
OTHER FINANCIAL STATEMENT DETAIL
(In millions)
Three Months Six Months
Ended Ended
------------ ----------
Other operating expense Nov. 29, Nov. 23, Nov. 29, Nov. 23,
(income), net 2009 2008 2009 2008
----------------------- ---- ---- ---- ----
Net intellectual
property income $ - $(0.1) $ - $(0.2)
Litigation settlement 1.5 - (0.5) -
Other (0.4) - (0.4) -
---- --- ---- ---
Total other operating
expense (income), net $1.1 $(0.1) $(0.9) $(0.2)
==== ===== ===== =====
Other non-operating income
(expense), net
--------------------------
Gain (loss) on
investments $2.0 $(12.3) $5.3 $(15.1)
--- ------ --- ------
Total other non-operating
income (expense), net $2.0 $(12.3) $5.3 $(15.1)
==== ====== ==== ======
Web site: http://www.national.com/