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NATIONAL SEMICONDUCTOR REPORTS EARNINGS OF 68 CENTS PER SHARE
WITHOUT CERTAIN GAINS FOR FOURTH QUARTER OF FISCAL 2000
June 8, 2000 - National Semiconductor Corporation (NYSE:NSM) today reported net income of $134.2 million, or 68 cents per share, on revenues of $595.3 million before the effect of certain gains for the fourth quarter of fiscal 2000, which ended May 28, 2000. This compares with a loss of $40 million, or 24 cents per share, on revenues of $486 million before the effect of certain charges for its fourth quarter of fiscal 1999, which ended May 30, 1999. Details of these gains and charges are listed in the financial tables.
Including the gains, the company reported net income of $153.9 million, or 78 cents per share (fully diluted) for the fourth quarter, compared with a reported loss of $783.5 million, or $4.65 per share, on revenues of $477 million for the fourth quarter of fiscal 1999.
"Led by robust analog and wireless sales, we had an outstanding quarter," said Brian Halla, chairman, president and CEO of National Semiconductor. "Focus on execution drove our gross margins to 51 percent, up from 48 percent in the previous quarter," he added.
"Now we know we are in the right markets, with the right products and the right customers," Halla said.
National said it is continuing to see customer endorsements that validate the company's focus on its powerhouse portfolio of analog-based solutions for wireless communications, information appliances and gigabit networking.
Sales for the quarter grew eight percent sequentially and 32 percent year-to-year. The quarterly year-to-year comparison excludes the Cyrix standalone PC processor business, which was sold in September 1999.
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Summary of results
3 months ended:
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May 28, 2000
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May 30, 1999 |
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(excluding certain gains)
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Total Company as reported
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(excluding certain charges) |
Total Company as reported |
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Net sales |
$ 595.3 |
$ 595.3 |
$ 486.0 |
$ 477.0 |
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Net earnings (loss) |
$ 134.2 |
$ 153.9 |
$ (40.0) |
$ (783.5) |
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Earnings (loss) per share
(fully diluted) |
$ 0.68 |
$ 0.78 |
$ (0.24) |
$ (4.65) |
All figures in millions of dollars, except per share amounts |
National said the strong bookings experienced in the recent quarter position the company for sequential revenue growth as it enters the summer quarter. The company reported that worldwide bookings grew nearly 40 percent over last year's fourth quarter and more than 20 percent over this year's February quarter. Monthly orders increased steadily through the quarter. All regions experienced double-digit year-over-year and sequential quarterly order growth. This included an almost 80 percent increase in orders in Europe and better than 60 percent growth in Japan, compared with last year. Bookings significantly exceeded billings in all regions.
Analog bookings set the pace for the company as a whole, led by power management, interface, wireless and audio products focused on mobile phone handset and display markets. Information appliance orders also grew as bookings approximately tripled for National? Geode? and DVD devices over last year's levels. PC motherboard product bookings grew steadily throughout the quarter. Historical order comparisons exclude all orders for Cyrix standalone processors.
"The worldwide semiconductor industry is currently enjoying phenomenal growth in analog products," Halla said. "National Semiconductor is ideally positioned to capture its share of this growth and deliver added value to its shareholders."
"Analog technologies will differentiate the next generation of information access solutions," he added. "We believe our analog focus and our ability to execute will result in an even stronger fiscal 2001."
For the year, the company reported net income of $305.6 million, or
$1.59 per share, on revenues of $2.1 billion before the effect of certain gains and charges. This compares with a loss of $220.6 million, or $1.32 per share before the effect of certain charges, on revenues of $2.0 billion for fiscal 1999. Including these gains and charges, the company reported net profits of $620.8 million, or $3.24 per share (fully diluted), for fiscal year 2000, compared with a loss of $1.0 billion, or $6.04 per share, for the previous year after certain charges. The details of these gains and charges are listed in the financial tables.
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Summary of results
12 months ended:
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May 28, 2000
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May 30, 1999 |
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(excluding certain gains and charges)
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Total Company as reported
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(excluding certain charges) |
Total Company as reported |
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Net sales |
$ 2,139.9 |
$ 2,139.9 |
$ 1,947.8 |
$1,956.8 |
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Net earnings (loss) |
$ 305.6 |
$ 620.8 |
$ (220.6) |
$ (1,009.9) |
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Earnings (loss) per share
(fully diluted) |
$ 1.59 |
$ 3.24 |
$ (1.32) |
$ (6.04) |
All figures in millions of dollars, except per share amounts |
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 first quarter, 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 and as updated in the company's 10-Q for the quarter ended February 27, 2000 (see the Outlook section of Management's Discussion and Analysis of Results of Operations and Financial Conditions).
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NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except per share amounts)
Three Months Ended Twelve Months Ended
------------------ -------------------
May 28, May 30, May 28, May 30,
2000 1999 2000 1999
-------- -------- -------- --------
Net sales $ 595.3 $ 477.0 $ 2,139.9 $1,956.8
Operating costs and expenses:
Cost of sales 291.5 376.8 1,154.9 1,553.5
Research and development 95.3 117.0 386.1 471.3
Selling, general and
administrative 83.1 77.2 312.3 317.4
Special items (19.7) 688.4 (55.3) 700.9
------- ------ -------- -------
Total operating costs
and expenses 450.2 1,259.4 1,798.0 3,043.1
------- ------ -------- -------
Operating income(loss) 145.1 (782.4) 341.9 (1,086.3)
Interest income(expense), net 10.3 (1.7) 15.3 (2.2)
Other income, net 0.4 0.6 285.3 3.1
------- ------- -------- -------
Income(loss) before
income taxes and
extraordinary item 155.8 (783.5) 642.5 (1,085.4)
Income tax provision(benefit) 1.9 - 14.9 (75.5)
------- ------ -------- -------
Net income(loss) before
extraordinary item 153.9 (783.5) 627.6 (1,009.9)
Extraordinary loss on early
extinguishment of debt, net
of taxes of $0.4 million - - 6.8 -
------- ------ -------- -------
Net income(loss) $ 153.9 $(783.5) $ 620.8 $(1,009.9)
======= ====== ======== =======
Income(loss) per share:
Basic $ 0.87 $ (4.65) $ 3.58 $ (6.04)
Diluted $ 0.78 $ (4.65) $ 3.24 $ (6.04)
Selected income statement ratios as a percentage of sales:
Gross Margin 51.0% 21.0% 46.0% 20.6%
Research and Development
excluding in-process R&D
charge for fiscal 2000 16.0% 24.5% 18.0% 24.1%
Selling, general and
administrative 14.0% 16.2% 14.6% 16.2%
Net income(loss) 25.9% (164.3%) 29.0% (51.6%)
Effective tax rate 1.2% 0% 2.3% 7.0%
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
May 28, May 30,
2000 1999
ASSETS -------- --------
Current assets:
Cash and cash equivalents $ 778.8 $ 418.7
Short-term marketable investments 71.1 107.2
Receivables, net 258.6 171.9
Inventories 192.9 141.3
Deferred tax assets 125.7 117.9
Other current assets 40.5 32.2
-------- --------
Total current assets 1,467.6 989.2
Property, plant and equipment 2,303.1 2,319.1
Less accumulated depreciation (1,499.4) (1,403.1)
-------- --------
Net property, plant and equipment 803.7 916.0
Other assets 110.9 139.1
-------- --------
Total assets $2,382.2 $2,044.3
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt $ 31.4 $ 49.3
Accounts payable 194.5 189.8
Accrued expenses 315.1 348.1
Income taxes payable 86.7 77.8
-------- --------
Total current liabilities 627.7 665.0
Long-term debt 48.6 416.3
Other non-current liabilities 62.6 62.2
-------- --------
Total liabilities 738.9 1,143.5
-------- --------
Commitments and contingencies
Shareholders' equity:
Common stock 88.8 84.5
Additional paid-in capital 1,395.3 1,253.1
Retained earnings (deficit) 186.7 (434.1)
Accumulated other comprehensive loss (27.5) (2.7)
-------- --------
Total shareholders' equity 1,643.3 900.8
-------- --------
Total liabilities and shareholders' equity $2,382.2 $2,044.3
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NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Twelve Months Ended
--------------------
May 28, May 30,
2000 1999
------- -------
Cash flows from operating activities:
Net income(loss) $ 620.8 $(1,009.9)
Adjustments to reconcile net income(loss)
with net cash provided by operations:
Depreciation and amortization 262.3 405.6
(Gain)loss on investments (272.5) 0.1
Loss on disposal of equipment 11.9 50.5
Non-cash special items (55.3) 700.9
Other, net 1.6 0.7
Changes in certain assets and liabilities, net:
Receivables (86.7) 36.6
Inventories (57.0) 142.6
Other current assets (8.3) 44.2
Accounts payable and accrued expenses (9.7) (80.6)
Current and deferred income taxes (3.1) (61.2)
Other liabilities (5.8) (3.4)
-------- --------
Net cash provided by operating activities 398.2 226.1
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (169.9) (303.3)
Sale of equipment 8.6 -
Sale and maturity of marketable investments 151.2 167.1
Purchase of marketable investments (115.1) (162.0)
Sale of investments 286.0 0.1
Disposition of Cyrix PC processor business 75.0 -
Business acquisition, net of cash acquired (22.2) -
Purchase of investments and other, net (4.6) (19.1)
-------- --------
Net cash provided by (used by)
investing activities 209.0 (317.2)
-------- --------
Cash flows from financing activities:
Proceeds from bank borrowing - 77.5
Redemption of 6.5% convertible
subordinated notes (265.8) -
Repayment of debt (114.7) (56.5)
Issuance of common stock, net 133.4 28.0
-------- --------
Net cash provided by (used by)
financing activities (247.1) 49.0
-------- --------
Net change in cash and cash equivalents 360.1 (42.1)
Cash and cash equivalents at beginning of year 418.7 460.8
-------- --------
Cash and cash equivalents at end of year $ 778.8 $ 418.7
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PART I. FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(in millions, except per share amounts)
Three Months Ended Twelve Months Ended
------------------ --------------------
May 28, May 30, May 28, May 30,
2000 1999 2000 1999
-------- ------- -------- --------
Income(loss) per share:
Basic $ 0.87 $ (4.65) $ 3.58 $ (6.04)
Diluted $ 0.78 $ (4.65) $ 3.24 $ (6.04)
Weighted average shares:
Basic 177.1 168.5 173.6 167.1
Diluted 197.0 168.5 191.7 167.1
Income(loss) used in basic
and diluted loss
per common share
calculation $ 153.9 $(783.5) $ 620.8 $(1,009.9)
Notes to Financial Tables
-------------------------
The following table presents net income(loss), excluding
certain (gains)charges:
Three Months Ended Twelve Months Ended
------------------ --------------------
May 28, May 30, May 28, May 30,
2000 1999 2000 1999
-------- ------- -------- --------
Net income(loss) as reported $ 153.9 $ (783.5) $ 620.8 $(1,009.9)
Special items (19.7) 688.4 (55.3) 700.9
Other income, net -- Gain on
sale of Fairchild stock - - (270.7) -
IBM contract termination
charges - - - 48.6
PC processor exit charges,
primarily inventory
write-off - 55.1 - 55.1
-------- ------- -------- --------
134.2 (40.0) 294.8 (205.3)
Income tax (expense)benefit - - 4.0 (15.3)
-------- ------- -------- --------
134.2 (40.0) 298.8 (220.6)
Extraordinary loss on early
extinguishment of debt - - 6.8 -
-------- ------- -------- --------
Net income(loss) excluding
certain (gains)charges $ 134.2 $ (40.0) $ 305.6 $ (220.6)
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Net income(loss) per share: $ 0.68 $ (0.24) $ 1.59 $ (1.32)
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Special items consisted of the following:
Three Months Ended Twelve Months Ended
------------------ --------------------
May 28, May 30, May 28, May 30,
2000 1999 2000 1999
-------- ------- -------- --------
Restructuring of operations $ (1.7) $ 688.4 $ (14.7) $ 700.9
Gain on disposition of Cyrix
PC processor business - - (26.8) -
In-process R&D charge - - 4.2 -
Other (18.0) - (18.0) -
-------- ------- -------- --------
$ (19.7) $ 688.4 $ (55.3) $ 700.9
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Special items for the fourth quarter of
fiscal 2000 included a credit of $18.0 million to reduce the excess
portion of a contingent liability related to an agreement, which expired
in March 2000, stemming from the disposition of Fairchild Semiconductor in
fiscal 1997. In addition, the Company recorded a $1.7 million credit
to reduce restructure reserves for actions that were fully completed
during the quarter.
Special items for fiscal 2000 also included an additional $13.0 million
credit for the reduction of restructure reserves related to other actions
that were fully completed during the year, a $26.8 million gain from the
sale of the PC processor business to VIA Technologies, Inc., and a $4.2
million in-process research and development charge related to the
acquisition of Algorex, Inc.
Special items for the fourth quarter of fiscal 1999 included a $688.4
million restructure charge related to the Company's decision in May 1999
to exit the PC processor business. Special items for fiscal 1999
also included an additional $12.5 million net restructure charge. |
(in millions) Three Months Ended Twelve Months Ended
------------------ -------------------
May 28, May 30, May 28, May 30,
2000 1999 2000 1999
-------- -------- -------- --------
Interest income(expense), net
-----------------------------
Interest income $ 11.6 $ 6.3 $ 33.2 $ 26.9
Interest expense (1.3) (8.0) (17.9) (29.1)
-------- -------- -------- --------
Interest income(expense), net $ 10.3 $ (1.7) $ 15.3 $ (2.2)
======== ======== ======== ========
Other income, net
-----------------
Net intellectual property income $ 0.9 $ 0.4 $ 11.5 $ 11.3
Gain on investments, net - 0.2 272.5 0.1
Other (0.5) - 1.3 (8.3)
-------- -------- -------- --------
Total other income, net $ 0.4 $ 0.6 $ 285.3 $ 3.1
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