NATIONAL SEMICONDUCTOR REPORTS PROFIT FOR FIRST QUARTER OF FISCAL 2000
September 9, 1999 - National Semiconductor Corporation® (NYSE:NSM)today reported a profit of $47.1 million, or 25 cents per share, on revenues of $481.8 million for its first quarter of fiscal 2000, which ended August 29, 1999. Included in the pretax profit of $49.6 million is a one-time gain of $48.4 million from the sale of Fairchild Semiconductor stock. Without this gain the company realized a pretax profit of $1.2 million in the quarter. In the comparable quarter of fiscal 1999, National reported a loss of $104.8 million, or 63 cents per share, on revenues of $469.6 million.
Summary of results
3 months ended: August 29, 1999 August 30, 1998
Net sales $ 481.8 $ 469.6
Other income, net (pretax) $ 57.0(a) $ 0.3
Net income (loss) $ 47.1 $(104.8)
Earnings (loss) per share diluted $ 0.25 $ (0.63)
All figures in millions of dollars, except per share amounts
(a) Included in Other income, net is a $48.4 million gain on the sale of Fairchild Semiconductor stock.
``We are ahead of schedule on the 'return to profits' plan we announced on May 5, 1999,'' said Brian L. Halla, chairman, president and chief executive officer. ``Overall market conditions for our industry continued to improve, and we experienced stronger than expected bookings through the summer quarter. In addition, we completed our exit from the PC processor business with the sale of that portion of the Cyrix business last week,'' Halla said.
National reported that overall first quarter bookings grew 12 percent over last year's first quarter in spite of negative bookings in this quarter for discontinued Cyrix PC processors. Excluding Cyrix PC processor orders, bookings grew 38 percent over last year, and also showed improvement over the fourth quarter of fiscal 1999. Monthly bookings picked up through the quarter with August bookings even better than July. Excluding Cyrix PC processors, all regions grew orders strongly compared to last year, with bookings in Japan being particularly robust. Bookings materially exceeded billings in all regions.
First quarter Analog segment orders continued at the fourth quarter's strong rate and were up 57 percent over last year's first quarter, led by wireless specific circuits and related power management devices. Orders for power, amplifier, and wireless specific devices doubled over last year. The Information Appliance segment also showed strong growth compared to fourth quarter and last year's first quarter with seasonal improvements in advanced I/O products for PC motherboards being enhanced by new product introductions. Bookings for National's Other Products segment were down slightly due to lower orders for our high-reliability products for the aerospace and military markets.
``Given the better than expected order patterns over the summer, particularly in the mobile phone and PC markets, we have entered the fall with much better backlog in place for delivery in the second quarter,'' Halla added. ``We are looking for continued meaningful improvement in both revenue and profitability in Q2.''
This outlook contains forward looking statements dependent on a number of risks and uncertainties including such factors as, but not restricted to, new orders received and shipped during the remainder of the second quarter, the timely transfer of new submicron production facilities, the degree of factory utilization, the successful sale of existing inventories, and the ramp up of recently introduced products. Other risk factors are included in the company's 10-K for the year ended May 30, 1999 (see the Outlook section of Management's Discussion and Analysis of Results of Operations and Financial Conditions).
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except per share amounts)
Three Months Ended
Aug 29, Aug 30,
1999 1998
-------- --------
Net sales $ 481.8 $ 469.6
Operating costs and expenses:
Cost of sales 296.7 414.6
Research and development 115.1 122.1
Selling, general and administrative 76.0 73.0
-------- --------
Total operating costs and expenses 487.8 609.7
-------- --------
Operating loss (6.0) (140.1)
Interest income(expense), net (1.4) 0.1
Other income, net 57.0 0.3
-------- --------
Net income (loss) before taxes 49.6 (139.7)
Income tax expense (benefit) 2.5 (34.9)
-------- --------
Net income (loss) $ 47.1 $(104.8)
======== ========
Income (loss) per share:
Basic $ 0.28 $ (0.63)
Diluted $ 0.25 $ (0.63)
Selected income statement ratios as a percentage of sales:
Gross margin 38.4% 11.7%
Research and development 23.9% 26.0%
Selling, general and administrative 15.8% 15.5%
Net income (loss) 9.8% (22.3%)
Effective tax rate 5.0% 25.0%
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
Aug 29, May 30,
1999 1999
ASSETS -------- --------
Current assets:
Cash and cash equivalents $ 428.9 $ 418.7
Short-term marketable investments 108.4 107.2
Receivables, net 208.7 171.9
Inventories 145.9 141.3
Deferred tax assets 117.9 117.9
Other current assets 34.1 32.2
-------- --------
Total current assets 1,043.9 989.2
Property, plant and equipment 2,348.2 2,319.1
Less accumulated depreciation (1,482.5) (1,403.1)
-------- --------
Net property, plant and equipment 865.7 916.0
Other assets 302.9 139.1
-------- --------
Total assets $2,212.5 $2,044.3
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short term borrowings and current
portion of long-term debt $ 48.2 $ 49.3
Accounts payable 138.2 189.8
Accrued expenses 322.1 348.1
Income taxes 90.4 77.8
-------- --------
Total current liabilities 598.9 665.0
Long-term debt 393.4 416.3
Other non-current liabilities 63.7 62.2
-------- --------
Total liabilities 1,056.0 1,143.5
-------- --------
Commitments and contingencies
Shareholders' equity:
Common stock 85.8 84.5
Additional paid-in capital 1,288.1 1,253.1
Retained deficit (387.0) (434.1)
Accumulated other comprehensive
income (loss) 169.6 (2.7)
-------- --------
Total shareholders' equity 1,156.5 900.8
-------- --------
Total liabilities and shareholders' equity $2,212.5 $2,044.3
======== ========
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Three Months Ended
Aug 29, Aug 30,
1999 1998
------- -------
Cash flows from operating activities:
Net income (loss) $ 47.1 $ (104.8)
Adjustments to reconcile net income (loss)
with net cash used by operations:
Depreciation and amortization 72.6 89.5
Gain on investment (48.4) --
Loss on disposal of equipment 3.7 1.7
Tax benefit associated with stock options -- 0.2
Other, net 7.4 --
Changes in certain assets and liabilities, net:
Receivables (36.8) (4.7)
Inventories (4.6) 74.4
Other current assets (1.9) 7.8
Accounts payable and accrued expenses (77.7) (52.1)
Current and deferred income taxes 12.6 (18.7)
Other liabilities 1.5 (0.8)
-------- --------
Net cash used by operating activities (24.5) (7.5)
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (21.7) (73.9)
Sale and maturity of marketable investments 61.3 33.3
Purchase of marketable investments (62.5) (22.8)
Proceeds from sale of investment 52.2 --
Purchase of investments and other, net (1.8) (9.4)
-------- --------
Net cash provided by (used by)
investing activities 27.5 (72.8)
-------- --------
Cash flows from financing activities:
Repayment of debt (19.0) (9.5)
Issuance of common stock, net 26.2 5.2
-------- --------
Net cash provided by (used by)
financing activities 7.2 (4.3)
-------- --------
Net change in cash and cash equivalents 10.2 (84.6)
Cash and cash equivalents at beginning of period 418.7 460.8
-------- --------
Cash and cash equivalents at end of period $ 428.9 $ 376.2
======== ========
PART I. FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(in millions, except per share amounts)
Three Months Ended
Aug 29, Aug 30,
1999 1998
-------- -------
Income (loss) per share:
Basic $ 0.28 $ (0.63)
Diluted $ 0.25 $ (0.63)
Weighted average shares:
Basic 170.3 165.8
Diluted 185.4 165.8
Income (loss) used in basic and
diluted earnings per share
calculation $ 47.1 $(104.8)
NOTES TO FINANCIAL TABLES
(in millions)
Three Months Ended
Aug 29, Aug 30,
1999 1998
-------- --------
Interest income(expense), net
-----------------------------
Interest income $ 5.9 $ 7.0
Interest expense $ (7.3) $ (6.9)
-------- --------
Interest income(expense), net $ (1.4) $ 0.1
======== ========
Other income, net
-----------------
Net intellectual property income $ 6.8 $ 0.3
Gain on investment 48.4 --
Other 1.8 --
-------- --------
Total other income, net $ 57.0 $ 0.3
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