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National Semiconductor Reports $65.8 Million Profit And 11 Percent Increase in Sales for Second Quarter, FY2004
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National Semiconductor is a registered trademark.
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except per share amounts)
Three Months Ended Six Months Ended
---------------------- -------------------
Nov. 23, Nov. 24, Nov. 23, Nov. 24,
2003 2002 2003 2002
---------------------- -------------------
Net sales $ 473.5 $ 422.3 $ 898.3 $ 842.9
Operating costs and expenses:
Cost of sales 236.5 241.2 460.9 479.5
Research and development 83.2 107.1 175.3 217.8
Selling, general and administrative 72.8 68.3 141.2 138.2
Special items 6.0 0.7 18.6 0.7
---------------------- --------------------
Total operating costs and expenses 398.5 417.3 796.0 836.2
---------------------- --------------------
Operating income 75.0 5.0 102.3 6.7
Interest income, net 2.5 3.6 5.6 7.7
Other income (expense), net (2.7) (0.4) 2.8 (1.9)
---------------------- --------------------
Income before taxes and cumulative effect
of a change in accounting principle 74.8 8.2 110.7 12.5
Income tax expense 9.0 2.0 13.3 5.0
---------------------- --------------------
Income before cumulative effect of a
change in accounting principle 65.8 6.2 97.4 7.5
Cumulative effect of a change in accounting
principle including tax effect of $0.2 million - - (1.9) -
---------------------- -------------------
Net income $ 65.8 $ 6.2 $ 95.5 $ 7.5
====================== ===================
Earnings per share:
Income before cumulative effect of a change
in accounting principle:
Basic $ 0.37 $ 0.03 $ 0.53 $ 0.04
Diluted $ 0.34 $ 0.03 $ 0.50 $ 0.04
Net income:
Basic $ 0.37 $ 0.03 $ 0.52 $ 0.04
Diluted $ 0.34 $ 0.03 $ 0.49 $ 0.04
Selected income statement ratios as a percentage of sales
Gross margin 50.1% 42.9% 48.7% 43.1%
Research and development 17.6% 25.4% 19.5% 25.8%
Selling, general and administrative 15.4% 16.2% 15.7% 16.4%
Net income 13.9% 1.5% 10.6% 0.9%
Effective tax rate 12.0% N/A 12.0% N/A
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
Nov. 23, May 25,
2003 2003
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ASSETS
Current assets:
Cash and cash equivalents $ 513.5 $ 802.2
Short-term marketable investments 184.8 113.2
Receivables 166.1 137.1
Inventories 167.3 142.2
Deferred tax assets 66.0 66.0
Other current assets 26.6 20.5
----------- -----------
Total current assets 1,124.3 1,281.2
Net property, plant and equipment 679.5 680.7
Goodwill 173.3 173.3
Other assets 99.6 109.4
------------ -----------
Total assets $2,076.7 $2,244.6
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 22.4 $ 2.3
Accounts payable 108.2 107.0
Accrued expenses 188.0 192.3
Income taxes payable 54.6 49.6
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Total current liabilities 373.2 351.2
Long-term debt - 19.9
Other noncurrent liabilities 180.9 167.5
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Total liabilities 554.1 538.6
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Commitments and contingencies
Shareholders' equity:
Common stock 89.0 91.8
Additional paid-in capital 1,177.3 1,451.3
Retained earnings 372.7 277.2
Accumulated other comprehensive loss (116.4) (114.3)
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Total shareholders' equity 1,522.6 1,706.0
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Total liabilities and shareholders' equity $2,076.7 $2,244.6
========= ========
NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Six Months Ended
----------------------------------
Nov. 23, Nov. 24,
2003 2002
------------- -------------
Cash flows from operating activities:
Net income $ 95.5 $ 7.5
Adjustments to reconcile net income with net cash
provided by operating activities:
Cumulative effect of a change in accounting principle 1.9 -
Depreciation and amortization 107.3 113.8
Gain on investments (3.0) (0.5)
Share in net losses of equity-method investments 7.7 6.1
Loss on disposal of equipment 2.2 1.6
Noncash special items 4.5 0.7
Other, net 2.4 0.3
Changes in certain assets and liabilities, net:
Receivables (21.4) (12.6)
Inventories (29.7) (8.0)
Other current assets (6.3) (9.8)
Accounts payable and accrued expenses (14.6) (15.8)
Income taxes payable 5.0 8.6
Other noncurrent liabilities 11.1 7.3
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Net cash provided by operating activities 162.6 99.2
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Cash flows from investing activities:
Purchase of property, plant and equipment (99.0) (98.3)
Sale and maturity of available-for-sale securities 314.0 300.1
Purchase of available-for-sale securities (386.7) (290.2)
Sale of investments 7.2 8.7
Sale of equipment - 2.3
Business acquisition, net of cash aquired - (11.0)
Investment in nonpublicly traded companies (1.7) (16.7)
Funding of benefit plan (4.5) (3.6)
Other, net 1.1 (1.3)
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Net cash used by investing activities (169.6) (110.0)
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Cash flows from financing activities:
Repayment of debt (1.8) (3.5)
Issuance of common stock 120.1 19.4
Purchase and retirement of treasury stock (400.0) -
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Net cash (used by) provided by financing activities (281.7) 15.9
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Net change in cash and cash equivalents (288.7) 5.1
Cash and cash equivalents at beginning of period 802.2 681.3
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Cash and cash equivalents at end of period $ 513.5 $ 686.4
======== ========
PART I. FINANCIAL INFORMATION
EARNINGS PER SHARE (Unaudited)
(in millions, except per share amounts)
Three Months Ended Six Months Ended
--------------------- -------------------
Nov. 23, Nov. 24, Nov. 23, Nov. 24,
2003 2002 2003 2002
--------------------- -------------------
Earnings per share:
Basic $ 0.37 $ 0.03 $ 0.52 $ 0.04
Diluted $ 0.34 $ 0.03 $ 0.49 $ 0.04
Net income used in basic and diluted
earnings per share calculation $ 65.8 $ 6.2 $ 95.5 $ 7.5
Weighted-average shares:
Basic 180.1 181.3 182.3 181.0
Diluted 195.5 182.0 193.7 184.5
NOTES TO FINANCIAL STATEMENTS:
(in millions, except per share amounts)
Reconciliation of net income as reported to net income excluding special item:
Three Months Ended
--------------------------
Nov. 23,
2003
-------------
Net income as reported $ 65.8
Add back:
Special item - Cost reduction actions, net
of tax effect of $0.7 million 5.3
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Net income excluding special item $ 71.1
============
Earnings per share:
Basic $ 0.39
Diluted $ 0.36
Weighted-average shares:
Basic 180.1
Diluted 195.5
Three Months Ended Six Months Ended
-------------------- --------------------
Nov. 23, Nov. 24, Nov. 23, Nov. 24,
2003 2002 2003 2002
-------------------- ---------------------
Special items
Cost reduction items $ 6.0 $ - $ 14.6 $ -
Disposition of IA business - - 4.0 -
In-process research and development charges - 0.7 - 0.7
-------------------- ---------------------
Total special items $ 6.0 $ 0.7 $ 18.6 $ 0.7
================= ==================
Interest income, net
Interest income $ 2.7 $ 4.1 $ 5.9 $ 8.6
Interest expense (0.2) (0.5) (0.3) (0.9)
-------------------- ---------------------
Interest income, net $ 2.5 $ 3.6 $ 5.6 $ 7.7
================= ===================
Other income(expense), net
Net intellectual property income $ - $ 2.5 $ 8.0 $ 4.1
Gain(loss) on investments 0.7 (0.2) 3.0 0.5
Share in net losses of equity-method
Investments (2.9) (2.5) (7.7) (6.1)
Other (0.5) (0.2) (0.5) (0.4)
--------------------- ---------------------
Total other income (expense), net $ (2.7) $ (0.4) $ 2.8 $ (1.9)
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