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National Semiconductor Reports Results for First Quarter Fiscal 2010

Q1 sales were $314 million, up 12% from Q4 of fiscal 2009 and down 32% from Q1 of fiscal 2009

Gross margin percentage of 61.1%, up from 58.3% in Q4 and down from 66.0% in last year’s Q1

Bookings were up 17% over Q4

Sales outlook for Q2 of fiscal 2010 expected to increase 3 to 8 percent sequentially

Sep 10, 2009

Sept. 10, 2009 -- National Semiconductor Corp. (NYSE:NSM) today reported sales of $314 million and net income of $29.8 million, or 13 cents per diluted share, for the first quarter of fiscal 2010, which ended Aug. 30, 2009.

National’s first quarter sales were 12 percent higher than sales in the fourth quarter of fiscal 2009, when the company reported $281 million in sales, but lower than the $466 million reported in last year’s first fiscal quarter. The sequential improvement in National’s first quarter sales was driven by increased demand for the company’s energy-efficient analog products, especially from distributors serving broad industrial markets. Net income of $29.8 million, or 13 cents per diluted share, was an increase from the net loss of $64 million and net loss of 28 cents per share in the fourth quarter of fiscal 2009. Fourth quarter fiscal 2009 results included $116 million of pre-tax charges related to restructuring expenses.

Gross margin of 61.1 percent in National’s first quarter was up from the 58.3 percent gross margin achieved in the fourth quarter of fiscal 2009 but down from the record-high 66.0 percent gross margin reported in the first quarter of fiscal 2009. Sequential gross margin improvement in the first quarter was due to improved product mix, higher production volume and benefits realized from sooner-than-expected ceasing of production at National’s assembly and test facility in Suzhou, China.

Bookings for Q1, Fiscal 2010
National’s total company bookings in the first quarter increased by approximately 17 percent sequentially over the fourth quarter. The increase in overall bookings was driven by higher order rates in North America, Europe and Japan. Total company bookings exceeded billings in the first quarter.

Notable Items in Q1, Fiscal 2010 Results
First quarter results included approximately $6 million in pre-tax restructuring charges related to the phased closure of National’s manufacturing facilities in Arlington, Texas and Suzhou, China, consistent with expectations.

Outlook for Q2, Fiscal 2010
National anticipates that sales in the second quarter of fiscal 2010 will increase approximately 3 percent to 8 percent sequentially, or a range of approximately $325 million to $340 million.

“Demand was better than we expected, especially for our power management products going into broad industrial applications,” said Brian L. Halla, National’s chairman and CEO. “As a result, we were able to get our gross margins back above 60 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 Oct. 12, 2009 to shareholders of record at the close of business on Sept. 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.

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 celebrates 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.

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