National Semiconductor Reports Results for Fourth Quarter Fiscal 2010

- Q4 sales of $398.5 million increased 10% from Q3 of fiscal 2010 and 42% from Q4 of fiscal 2009

- GAAP earnings per share of 33 cents was up from 22 cents in Q3 and up from a loss of 28 cents in last year's Q4

- Gross margin of 68.8% increased from 67.3% in Q3 and 58.3% in Q4 of fiscal 2009

- Sales outlook for Q1 of fiscal 2011 expected to be up approximately 3 to 5 percent sequentially ($410 million to $418 million)

News provided by

National Semiconductor Corp.

Jun 10, 2010, 04:00 ET

SANTA CLARA, Calif., June 10 /PRNewswire-FirstCall/ -- National Semiconductor Corp. (NYSE: NSM) today reported sales of $398.5 million and net income of $79.2 million, or 33 cents per diluted share, for the fourth quarter of fiscal 2010, which ended May 30, 2010. 

National's fourth quarter sales were 10 percent higher than the third quarter of fiscal 2010, when the company reported $362 million in sales, and 42 percent higher than the $281 million reported in the fourth quarter of fiscal 2009.  Increased sales of National's analog and power management products to the personal mobile device and industrial markets boosted revenues in the fourth quarter.  

Fourth quarter net income of $79.2 million, or 33 cents per diluted share, was an increase from the $53.2 million, or 22 cents per diluted share, in the third quarter of fiscal 2010.  In last year's fourth quarter, National reported a net loss of $63.7 million, or a net loss of 28 cents per diluted share, which included $116.1 million of pre-tax charges primarily for severance and asset impairments related to a corporate restructuring.

Gross margin increased to 68.8 percent in the fourth quarter of fiscal 2010 driven by improvements in manufacturing cost performance and increased capacity utilization.  National reported gross margin of 67.3 percent in the third quarter of fiscal 2010 and 58.3 percent in the fourth quarter of fiscal 2009.

"Increased demand for our analog products for the wireless handset and industrial markets drove revenue growth in the quarter" said Don Macleod, National's president and chief executive officer.  "Looking forward to our summer quarter, we see these two end markets continuing to drive more revenue growth opportunities for our analog, and in particular, power management products."

Bookings for Q4, Fiscal 2010

Sequentially, National's total company bookings increased 12 percent as order rates increased from direct OEM customers and from distributors in all regions, especially Europe.  Bookings exceeded billings in the quarter.

Notable Items in Q4

Fourth quarter fiscal 2010 results included a $7.3 million restructuring charge related to manufacturing consolidation.  In addition, the company incurred a $2.1 million charge related to the early repayment of debt, which is included in other non-operating expenses.  Both of these items are on a pre-tax basis.

Outlook for Q1, Fiscal 2011

The company is projecting first quarter of fiscal 2011 revenues to increase 3 to 5 percent (between $410 million and $418 million) from the fourth quarter of fiscal 2010.  

Summary of Fiscal 2010

For fiscal 2010, National reported sales of $1.42 billion and GAAP net income of $209 million or 87 cents per diluted share.  In fiscal 2009, National reported sales of $1.46 billion, GAAP net income of $73 million or 31 cents per diluted share.  Gross margin of 65.9 percent in fiscal 2010 improved from fiscal 2009's gross margin of 62.7 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 July 12, 2010 to shareholders of record at the close of business on June 21, 2010.

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 Feb. 28, 2010.

About National Semiconductor

National Semiconductor is a leader in power management technology. Known for its easy-to-use analog integrated circuits and world-class supply chain, National's high-performance analog products enable its customers' systems to be more energy efficient. Headquartered in Santa Clara, Calif., National reported sales of $1.42 billion for fiscal 2010. Additional information is available at www.national.com.

NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except per share amounts)

Q4 FY10

Q3 FY10

Q4 FY09

YTD FY10

YTD FY09

Three Months Ended

Twelve Months Ended

May 30,
2010

Feb. 28,
2010

May 31,
2009

May 30,
2010

May 31,
2009

















Net sales

$

398.5

$

361.9

$

280.8

$

1,419.4

$

1,460.4

Cost of sales

124.2

118.2

117.2


484.2

544.1

Gross margin

274.3

243.7

163.6


935.2

916.3

















Research and development

70.2

69.0

51.9


272.7

306.0

Selling, general and administrative

81.3

81.7

65.2


317.0

283.0

Severance and restructuring expenses


7.3

6.4

116.1


20.1

143.9

In-process research and development charge

-

-

2.9


-

2.9

Other operating expense (income), net

(0.1)

0.6

(2.3)


(0.4)

(2.7)

















Operating expenses

158.7

157.7

233.8


609.4

733.1

















Operating income (loss)

115.6

86.0

(70.2)


325.8

183.2

















Interest income

0.5

0.4

0.8


1.8

10.4

Interest expense

(14.8)

(14.8)

(17.0)


(60.3)

(72.7)

Other non-operating income (expense), net

(4.8)

0.8

6.8


1.3

(7.3)

















Income (loss)before taxes

96.5

72.4

(79.6)


268.6

113.6

Income tax expense (benefit)

17.3

19.2

(15.9)


59.4

40.3

Net income (loss)

$

79.2

$

53.2

$

(63.7)

$

209.2

$

73.3

















Earnings (loss) per share:















Basic

$

0.33

$

0.22

$

(0.28)

$

0.88

$

0.32

Diluted

$

0.33

$

0.22

$

(0.28)

$

0.87

$

0.31


































Selected income statement ratios as a
percentage of sales:
































Gross margin

68.8%

67.3%

58.3%


65.9%

62.7%

Research and development

17.6%

19.1%

18.5%


19.2%

21.0%

Selling, general and administrative

20.4%

22.6%

23.2%


22.3%

19.4%

Net income (loss)

19.9%

14.7%

(22.7%)


14.7%

5.0%

















Effective tax rate

17.9%

26.5%

20.0%


22.1%

35.5%


Percentage change in selected items:

Increase (decrease)

Q4 FY10
vs
Q3 FY10

Q4 FY10
vs
Q4 FY09

YTD FY10
vs
YTD FY09





Net sales

10.1%

41.9%

(2.8%)

Net income

48.9%

224.3%

185.4%

Diluted earnings per share

50.0%

217.9%

180.6%







NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)


May 30,
2010

May 31,
2009

ASSETS









Current assets:







Cash and cash equivalents

$

1,027.0

$

700.3

Receivables

98.2


71.7

Inventories

118.6


134.6

Deferred tax assets

70.3


72.6

Other current assets

156.8


108.0









Total current assets

1,470.9


1,087.2









Net property, plant and equipment

390.1


461.8

Goodwill

66.1


61.5

Deferred tax assets, net

245.5


251.5

Other assets

102.2


101.3

Total assets

$

2,274.8

$

1,963.3









LIABILITIES AND SHAREHOLDERS' EQUITY







Current liabilities:







Current portion of long-term debt

$

276.5

$

62.5

Accounts payable

49.8


40.3


Accrued expenses

204.5


144.6

Income taxes payable

17.6


28.2









Total current liabilities

548.4


275.6









Long-term debt

1,001.0


1,227.4

Long-term income taxes payable

175.3


162.6

Other non-current liabilities

124.2


120.7









Total liabilities

1,848.9


1,786.3









Commitments and contingencies
















Shareholders' equity:







Common stock of $0.50 par value

119.5


116.3

Additional paid-in-capital

188.3


67.6

Retained earnings

250.3


116.8

Accumulated other comprehensive loss

(132.2)


(123.7)









Total shareholders' equity

425.9


177.0

Total liabilities and shareholders' equity

$

2,274.8

$

1,963.3

NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)


Twelve Months Ended



May 30, 2010

May 31, 2009

Cash flows from operating activities:






Net income

$

209.2

$

73.3

Adjustments to reconcile net income with net cash provided by operating activities:






Depreciation and amortization

94.5

119.8

Share-based compensation

65.4

70.9

Excess tax benefit from share-based payment arrangements

(0.3)

(5.0)

Tax (expense) benefit associated with stock options

(6.8)

8.1

(Gain) loss on investments

(5.6)

7.3

Non-cash restructuring recovery

(8.3)

(1.5)

Loss (gain) on disposal of equipment

0.9

(0.1)

(Recovery) impairment of equipment and other assets

(1.2)

55.1

In-process research and development charge

-

2.9

Loss on extinguishment of debt

2.1

-

Other, net

4.7

0.7

Changes in certain assets and liabilities, net:






Receivables

(28.2)

65.2

Inventories

15.7

13.5

Other current assets

(23.1)

2.9

Accounts payable and accrued expenses

59.9

(38.9)

Current and deferred income taxes

14.6

12.7

Other non-current liabilities

9.4

(26.1)

Net cash provided by operating activities

402.9

360.8

Cash flows from investing activities:






Purchase of property, plant and equipment

(43.3)

(83.7)

Proceeds from sale of property, plant and equipment

3.1

1.1

Business acquisition, net of cash acquired

(4.8)

(4.5)

Funding of benefit plan

(1.6)

(6.4)

Redemption and net realized gains/losses of benefit plan

7.5

11.6

Other, net

(2.6)

0.2

Net cash used in investing activities

(41.7)

(81.7)

Cash flows from financing activities:






Proceeds from unsecured senior notes, net of issuance costs

244.9

-

Repayment of bank borrowing

(265.6)

(187.6)

Payment on software license obligations

(6.3)

-

Excess tax benefit from share-based payment arrangements

0.3

5.0

Minimum tax withholding paid on behalf of employees for net share settlements

(2.0)

(0.4)

Issuance of common stock

71.2

60.2

Cash payments in connection with stock option exchange program

(1.3)

-

Purchase and retirement of treasury stock

-

(128.4)

Cash dividends declared and paid

(75.7)

(64.4)

Net cash used in financing activities

(34.5)

(315.6)

Net change in cash and cash equivalents

326.7

(36.5)

Cash and cash equivalents at beginning of year

700.3

736.8

Cash and cash equivalents at end of year

$

1,027.0

$

700.3









PART I.  FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(In millions, except per share amounts)


Q4 FY10

Q3 FY10

Q4 FY09

YTD FY10

YTD FY09

Three Months Ended

Twelve Months Ended

May 30,
2010

Feb. 28,
2010

May 31,
2009

May 30,
2010

May 31,
2009

















Net income (loss) used in basic and diluted

















earnings per share calculation

$

79.2

$

53.2

$

(63.7)

$

209.2

$

73.3

















Earnings (loss) per share:















Basic

$

0.33

$

0.22

$

(0.28)

$

0.88

$

0.32

Diluted

$

0.33

$

0.22

$

(0.28)

$

0.87

$

0.31

















Weighted-average shares outstanding:















Basic


238.0

237.3

230.1


236.4

229.1

Diluted

243.6

242.5

230.1


241.3

235.1


















OTHER FINANCIAL STATEMENT DETAIL
(In millions)

Q4 FY10

Q3 FY10

Q4 FY09

YTD FY10

YTD FY09

Three Months Ended

Twelve Months Ended

May 30,
2010

Feb. 28,
2010

May 31,
2009

May 30,
2010

May 31,
2009

















Other operating expense (income), net:















Net intellectual property income

$

(0.3)

$

-

$

(2.3)

$

(0.3)

$

(2.7)

Litigation settlement

0.2

-

-


(0.3)

-

Other

-

0.6

-


0.2

-

Total other operating expense (income), net

$

(0.1)

$

0.6

$

(2.3)

$

(0.4)

$

(2.7)

















Other non-operating income (expense), net:















Gain (loss) on investments

$

(0.5)

$

0.8

$

6.8

$

5.6

$

(7.3)

Loss on extinguishment of debt

(2.1)

-

-


(2.1)

-

Net loss on derivative instrument in

fair value hedge

(2.2)

-

-


(2.2)

-

Total other non-operating income (expense), net

$

(4.8)

$

0.8

$

6.8

$

1.3

$

(7.3)



































Media Contact:

Financial:

LuAnn Jenkins

Mark Veeh

(408) 721-2440

(408) 721-5007

[email protected]

[email protected]

SOURCE National Semiconductor Corp.

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