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National Semiconductor Reports Results for First Quarter Fiscal 2009

Q1 sales were $466 million, up 1% from Q4 of fiscal 2008 and down 1% from Q1 of fiscal 2008

Record gross margin percentage of 66.0%, up from 65.9% in Q4 and 63.0% in last year’s Q1

EPS of 33 cents, down from the 34 cents reported in Q4 and up from the 30 cents reported in Q1 of fiscal 2008

Sales outlook for Q2 of fiscal 2009 expected to range from $470 million to $480 million

Sep 5, 2008

Sept. 5, 2008 -- National Semiconductor Corp. (NYSE:NSM) today reported sales of $466 million and net income of $80 million, or 33 cents per share, for the first quarter of fiscal 2009 which ended August 24, 2008.  In National’s fourth quarter of fiscal 2008, the company reported $462 million in sales, $83 million in net income and 34 cents per share.

Gross margin of 66.0 percent in National’s first quarter of fiscal 2009 set a new record for the company and was up from the 65.9 percent gross margin achieved in the fourth quarter of fiscal 2008.  Gross margin was considerably higher than the gross margin of 63.0% reported in the first quarter of fiscal 2008.  Strength in gross margin continues to be driven by strong manufacturing performance and cost efficiencies as well as improved product mix of higher-value analog products.

“The global energy crisis is a problem that needs solving, and with our leadership position in power management technology, this is our focus for growth,” said Brian L. Halla, National’s chairman and CEO.  “For example, we recently announced our SolarMagic technology, which significantly improves the efficiency of new or existing solar panel installations by recouping lost energy caused by shading or other sub-optimal conditions.”

Bookings for Q1, Fiscal 2009
National’s total company bookings in the first quarter of fiscal 2009 were down seasonally by about 7 percent compared to the prior quarter. This lower level of bookings was seen primarily in the distribution channel.  It was also impacted by some truncation of longer-term backlog in our Japan region, which did not have any notable effect on near-term sales trends for that region; however, total company opening 13-week backlog for the second quarter was higher than the first quarter.  Total company billings exceeded bookings in the first quarter. 

Other Notable Items in Q1, Fiscal 2009 Results
Included in first quarter fiscal 2009 results was $1 million in severance and restructuring expense related to previously announced actions and $19 million in stock compensation expense under FASB Statement 123(R).  One year ago, the first quarter of fiscal 2008 included a $1 million credit in severance and restructuring and $20 million of stock compensation expense.  All of these amounts are on a pre-tax basis. 

Outlook for Q2, Fiscal 2009
National anticipates that sales in the second quarter of fiscal 2009 will range from $470 million to $480 million.  Operating expenses are expected to increase sequentially to a range of $178 million to $183 million primarily due to seasonally higher stock compensation expense and annual employee wage increases that went into effect around the beginning of September.

Stock Repurchase Program
During the first quarter of fiscal 2009, the company repurchased approximately $105 million of stock under its stock buyback program.  As of the end of the first quarter of fiscal 2009, National had approximately $151 million of authorization still available under approved programs for future stock repurchases.  National Semiconductor’s fully diluted weighted average share count for the first quarter of fiscal of 2009 was 241 million shares, down from 246 million shares in the fourth quarter of fiscal 2008.

Company Declares Dividend
The company announced today that the Board of Directors has declared a cash dividend of $0.06 per outstanding share of common stock.  This dividend will be paid on October 6, 2008 to shareholders of record at the close of business on September 18, 2008.

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 25, 2008 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 creates energy-efficient analog and mixed-signal semiconductors.  Its PowerWise® products enable systems that consume less power, extend battery life, and generate less heat.  Headquartered in Santa Clara, Calif., National reported sales of $1.89 billion for fiscal 2008 which ended May 25, 2008.  Additional company and product information is available at www.national.com.

For the complete financial tables download here.