-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Iz0PiKc00RibV2e3FaCJzrsq4yrO0RYb46hErszbupM7qT+8LTozMYOqTXtZ8Wzm aO7a1YlBQbKC+0Mqv9mnXg== 0000070530-03-000015.txt : 20030605 0000070530-03-000015.hdr.sgml : 20030605 20030605124325 ACCESSION NUMBER: 0000070530-03-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030525 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030605 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0000070530 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 952095071 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06453 FILM NUMBER: 03733701 BUSINESS ADDRESS: STREET 1: 2900 SEMICONDUCTOR DR STREET 2: PO BOX 58090 CITY: SANTA CLARA STATE: CA ZIP: 95052-8090 BUSINESS PHONE: 4087215000 MAIL ADDRESS: STREET 1: 2900 SEMICONDUCTOR DR CITY: SANTA CLARA STATE: CA ZIP: 95052-8090 8-K 1 form8k79_6503.txt NEWS RELEASE FOR JUNE 5, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 5, 2003 NATIONAL SEMICONDUCTOR CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-6453 95-2095071 (State of Incorporation) (Commission (I.R.S. Employer File Number) Identification Number) 2900 SEMICONDUCTOR DRIVE, P.O. BOX 58090 SANTA CLARA, CALIFORNIA 95052-8090 (Address of Principal Executive Offices) (408) 721-5000 (Registrant's telephone number, including area code) NATIONAL SEMICONDUCTOR CORPORATION Index Page ---- Item 7. Financial Statements and Exhibits 3 Item 9. Regulation FD Disclosure 3 Signature 4 NATIONAL SEMICONDUCTOR CORPORATION Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c ) Exhibits -------------- Exhibit No. Description of Exhibit - ----------- ---------------------- 99.1 News release dated June 5, 2003 issued by National Semiconductor Corporation. * * This exhibit is intended to be furnished and shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended. Item 9. REGULATION FD DISCLOSURE This information, furnished under this "Item 9. Regulation FD disclosure," is intended to be furnished under "Item 12. Results of Operations and Financial Condition" in accordance with SEC Release No. 33-8216 and shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended. On June 5, 2003, National Semiconductor Corporation issued a news release announcing earnings for the quarter ended May 25, 2003. The earnings news release, which has been attached as Exhibit 99.1, contains Condensed Consolidated Statements of Operations, Balance Sheets, and Statements of Cash Flows that are presented in accordance with United States generally accepted accounting principles, or GAAP. The news release also contains certain reconciliations of net loss as reported to net income (loss) excluding license writedowns and special items in 2003 and a tax refund in 2002 that are not presented in accordance with GAAP. These reconciliations are presented as supplemental information because we believe it provides investors with additional information on the components of special items and provides a better understanding of the underlying performance of our business. These non-GAAP reconciliations should be considered supplemental to, and not a substitute for or superior to, the financial statements prepared in accordance the GAAP that are contained in the news release. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. NATIONAL SEMICONDUCTOR CORPORATION Dated: June 5, 2003 \S\ Robert E. DeBarr Robert E. DeBarr Controller (Principal Accounting Officer) EX-99 3 form8k_6503.txt NEWS RELEASE JUNE 5, 2003 Exhibit 99.1 News Release National Reports 5% Sequential Revenue Growth for 4th Qtr 2003 PR Media: Financial: Jeff Weir Jim Foltz National Semiconductor National Semiconductor (408) 721-5199 (408) 721-5693 jeff.weir@nsc.com invest.group@nsc.com National Semiconductor Reports 5% Sequential Revenue Growth for Fourth Quarter, 12% Growth for 2003 Fiscal Year o Fourth quarter revenues rose 5% from Q3 to $425.3 million o Including special charges in Q4, company reported net loss of $4.4 million, or 2 cents loss per share o Excluding special charges in Q4, net income was $22.2 million, or 12 cents per share o Gross margin improved 190 basis points to 44.6% in Q4 o Fiscal year 2003 revenues increased 12% to $1.67 billion o Profit-improvement plan on track to achieve $120 million annualized cost savings SANTA CLARA, Calif., June 5, 2003 - National Semiconductor Corporation (NYSE:NSM) today reported revenues of $425.3 million for the fourth quarter of fiscal 2003, which ended May 25, 2003, and recorded a net loss of $4.4 million, or two cents per share. The fourth quarter net loss included $26.6 million of special charges primarily for severances and asset impairments associated with actions the company announced on May 21, 2003. Excluding these special charges, National would have reported net income of $22.2 million, or 12 cents per share. National's fourth quarter revenues were slightly higher than last year's fourth quarter revenues of $419.5 million. National's fourth quarter 2002 net income was $17.1 million, or nine cents per share, which included a tax refund of $11.5 million. Excluding the tax refund, net income in the fourth quarter of 2002 was $5.6 million, or three cents per share. On a sequential basis, fourth quarter 2003 revenues increased by 5 percent over third quarter revenues of $404.3 million. Fourth quarter gross margins improved to 44.6 percent from 42.7 percent in the third fiscal quarter 2003. "Our business has improved," said Brian L. Halla, National's chairman, president and CEO. "We grew revenues 5 percent in Q4 and made $22 million in operating profit, or 12 cents per share, before restructuring charges. We're on track with our plan to create higher returns faster for National's shareholders." Orders Increased Sequentially in Q4 National reported that orders in the fourth quarter grew more than 3 percent sequentially from the third quarter. Power management orders outgrew the company average while display and standard analog products exhibited double digit growth. This performance was consistent with National's focus to gain additional content in handsets and display applications. Worldwide bookings exceeded billings, with Japan showing the strongest bookings improvement. Outlook for Q1 2004 National's revenues for the first quarter of FY 2004 are expected to be flat to seasonally down 4 percent from the fourth quarter of 2003, consistent with historical patterns during the summer quarter. Gross margin percentage is expected to be flat to slightly down, depending on the level of revenue achieved during the quarter. Operating expenses are expected to decrease due to the profit-improvement actions taken in Q3 and Q4. Fiscal Year 2003 Summary For the year, National reported a net loss of $33.3 million, or 18 cents per share on revenues of $1.67 billion. This compares with a net loss for fiscal 2002 of $121.9 million, or $0.69 per diluted share on revenues of $1.49 billion. National's fiscal 2003 net loss included $43.6 million of special charges primarily for severances related to the workforce reductions announced in February and May of this year and impairment of certain assets, and $13.8 million in R&D expense for writedowns of technology licenses. Without these charges, National's net results for the year would have been income of $24.1 million, or 0.13 cents a share. National's gross margin increased 640 basis points from 37.0 percent for fiscal 2002 to 43.4 percent for fiscal 2003. Summary of Results - -------------------------------------------------------------------------------- For 3 months ended For 12 months ended May 25, May 26, May 25, May 26, 2003 2002 2003 2002 ------------------- -------------------- Net sales $425.3 $419.5 $1,672.5 $1,494.8 Net income (loss) as reported $ (4.4) $ 17.1 $ (33.3) $ (121.9) Earnings (loss) per diluted $ (0.02) $ 0.09 $ (0.18) $ (0.69) share as reported Net income (loss) excluding $22.2 $ 5.6 $ 24.1 $ (133.4) license writedowns and special items (2003) and tax refund (2002) Net income (loss) per diluted share $ 0.12 $ 0.03 $ 0.13 $ (0.75) excluding license writedowns and special items (2003) and tax refund (2002) All figures in millions of dollars, except per share amounts. - ------------------------------------------------------------------------------- Product Highlights During Fiscal Year National announced several new alliances and product initiatives with key partners during the 2003 fiscal year. These activities included National's worldwide alliance with ARM Limited on PowerWiseTM solutions to increase battery life for portable power products, such as mobile phones; the launch of a new line of high-voltage power management solutions for communications, industrial and automotive markets; continued innovations in audio and amplifier technology, such as National's amp-in-a-mike solution for handsets; production of an award-winning BluetootTM module and chipset for wireless customers; enhanced, integrated chipsets for LCD (flat panel) and CRT displays; and National's alliance with Microsoft to develop Smart Personal Objects Technology (SPOT) for consumer devices, such as wristwatches. "With great technology and world-class partners, we continue to build National's position in key markets, including handsets, flat panel displays and notebook PCs," Halla said. "As we focus on profitability and greater returns, we continue to leverage our strength in core analog technologies like power management and amplifiers. Power management circuits now represent about 30 percent of our sales." Aggressive Execution on Profit-Improvement Plan On February 20, 2003, National launched a series of profit-improvement activities designed to improve shareholder returns by prioritizing R&D spending on the company's higher-margin analog businesses. Total cost savings from these profit-improvement activities are expected to be approximately $30 million per quarter, or approximately $120 million annually. To date, under that profit-improvement plan, the company has taken the following steps: o Revised its technology and manufacturing agreement with Taiwan Semiconductor Manufacturing Corporation (TSMC) at the end of Q3. o Reduced its workforce by 500 at the end of Q3 and 340 at the end of Q4, for a total of 8 percent of National's workforce. These reductions bring National's workforce to 9,200. o Closed the cellular baseband business unit at the end of Q4. o Launched efforts in Q4 to sell the Information Appliance (IA) business unit, which consists primarily of the GeodeTM family of microprocessor products. The impact of these activities to date has provided National with approximately $25 million in cost-savings toward the $30 million-per-quarter target. The remaining cost-savings would be achieved upon completion of the sale or closure of the Information Appliance business unit. If a sale cannot be consummated, National intends to close the business unit and discontinue product development. Although the company is engaged in discussions about a potential sale, it cannot give assurance that a transaction will take place. This release contains forward-looking statements dependent on a number of risks and uncertainties. These factors include, but are not restricted to, new orders received and shipped during the remainder of the fourth quarter, the degree of factory utilization, the successful sale of existing inventories at existing prices, the ramp up of recently introduced products, and the timely completion of the actions updated above. Other risk factors are included in the company's 10-Q for the third quarter ended February 23, 2003, and the 10-K for the year ended May 26, 2002 (see the Outlook section of Management's Discussion and analysis of Results of Operations and Financial Conditions) and the Annual Report dated May 26, 2002. About National Semiconductor National Semiconductor is the premier analog company driving the information age. Combining real-world analog and state-of-the-art digital technology, the company is focused on analog-based semiconductor products, which include stand-alone devices and subsystems in the areas of power management, imaging, display drivers, audio, amplifiers and data conversion. The company targets key markets such as wireless, displays, PCs, networks and a broad range of portable applications. With headquarters in Santa Clara, California, National reported sales of $1.67 billion for its most recent fiscal year. Additional company and product information is available on the World Wide Web at www.national.com. National Semiconductor is a registered trademark. PowerWise and Geode are trademarks of National Semiconductor Corporation. All other brand or product names are trademarks or registered trademarks of their respective holders. NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except per share amounts) Three Months Ended Twelve Months Ended ------------------ ------------------- May 25, May 26, May 25, May 26, 2003 2002 2003 2002 ------- ------- -------- -------- Net sales $425.3 $419.5 $1,672.5 $1,494.8 Operating costs and expenses: Cost of sales 235.5 239.0 946.8 941.4 Research and development 98.1 111.3 435.6 441.0 Selling, general and administrative 65.3 67.1 270.3 260.9 Special items 26.6 8.2 44.3 9.3 ------- ------- -------- -------- Total operating costs and expenses 425.5 425.6 1,697.0 1,652.6 ------- ------- -------- -------- Operating loss (0.2) (6.1) (24.5) (157.8) Interest income, net 3.1 4.5 14.1 21.3 Other income(expense), net (4.8) 9.7 (12.9) 13.1 ------- ------- -------- -------- Income(loss) before income taxes (1.9) 8.1 (23.3) (123.4) Income tax expense(benefit) 2.5 (9.0) 10.0 (1.5) ------- ------- -------- -------- Net income(loss) $ (4.4) $ 17.1 $ (33.3) $ (121.9) ======= ======= ======== ======== Earnings(loss) per share: Basic $(0.02) $0.10 $(0.18) $(0.69) Diluted $(0.02) $0.09 $(0.18) $(0.69) Selected income statement ratios as a percentage of sales: Gross margin 44.6% 43.0% 43.4% 37.0% Research and development, excluding IPR&D charge 23.1% 26.5% 26.0% 29.5% Selling, general and administrative 15.4% 16.0% 16.2% 17.5% Net income(loss) (1.0%) 4.1% (2.0%) (8.2%) Effective tax rate N/A N/A N/A N/A NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions) May 25, May 26, 2003 2002 ASSETS -------- -------- Current assets: Cash and cash equivalents $ 802.2 $ 681.3 Short-term marketable debt securities 113.2 153.1 Receivables, net 137.1 131.7 Inventories 142.2 145.0 Deferred tax assets 66.0 58.7 Other current assets 20.5 38.3 -------- -------- Total current assets 1,281.2 1,208.1 Net property, plant and equipment 680.7 737.1 Long-term marketable debt securities - 10.0 Goodwill 173.3 173.3 Other assets 109.4 160.3 -------- -------- Total assets $2,244.6 $2,288.8 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 2.3 $ 5.5 Accounts payable 107.0 123.7 Accrued expenses 208.5 226.7 Income taxes 49.6 47.9 -------- -------- Total current liabilities 367.4 403.8 Long-term debt 19.9 20.4 Other non-current liabilities 151.3 83.5 -------- -------- Total liabilities 538.6 507.7 -------- -------- Commitments and contingencies Shareholders' equity: Common stock 91.8 90.2 Additional paid-in capital 1,451.3 1,402.5 Retained earnings 277.2 310.5 Accumulated other comprehensive loss (114.3) (22.1) -------- -------- Total shareholders' equity 1,706.0 1,781.1 -------- -------- Total liabilities and shareholders' equity $2,244.6 $2,288.8 ======== ======== NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) Twelve Months Ended --------------------- May 25, May 26, 2003 2002 ------- ------- Cash flows from operating activities: Net loss $ (33.3) $(121.9) Adjustments to reconcile net loss with net cash provided by operations: Depreciation, amortization and accretion 228.5 230.4 Net gain (loss) on investments 5.9 (9.4) Writedowns of R&D technology licenses 13.8 - Loss on disposal of equipment 2.9 4.4 Non-cash special items 12.8 (2.3) Other, net 0.8 0.2 Changes in certain assets and liabilities, net: Receivables (5.3) (6.4) Inventories 2.8 51.0 Other current assets 3.4 - Accounts payable and accrued expenses (34.9) (32.9) Current and deferred income taxes 3.7 12.8 Other noncurrent liabilities 8.4 (25.6) ------- ------- Net cash provided by operating activities 209.5 100.3 ------- ------- Cash flows from investing activities: Purchase of property, plant and equipment (171.3) (138.0) Sale and maturity of available-for-sale securities 892.6 88.6 Purchase of available-for-sale securities (843.4) (200.1) Sale of investments 18.0 11.2 Sale of equipment 2.3 - Business acquisitions, net of cash acquired (11.0) (42.1) Purchase of nonmarketable investments (16.8) (26.3) Funding of benefit plan (3.6) (14.9) Other, net 7.3 (1.7) ------- ------- Net cash used by investing activities (125.9) (323.3) ------- ------- Cash flows from financing activities: Repayment of debt (5.4) (20.6) Issuance of common stock, net 42.7 107.1 ------- ------- Net cash provided by financing activities 37.3 86.5 ------- ------- Net change in cash and cash equivalents 120.9 (136.5) Cash and cash equivalents at beginning of year 681.3 817.8 ------- ------- Cash and cash equivalents at end of year $ 802.2 $681.3 ======= ======= PART I. FINANCIAL INFORMATION EARNINGS PER SHARE (Unaudited) (in millions, except per share amounts) Three Months Ended Twelve Months Ended ------------------ ------------------- May 25, May 26, May 25, May 26, 2003 2002 2003 2002 ------- ------- ------- ------- Net Earnings(loss) per share: Basic $(0.02) $0.10 $(0.18) $(0.69) Diluted $(0.02) $0.09 $(0.18) $(0.69) Weighted-average shares: Basic 183.0 179.8 181.8 177.5 Diluted 183.0 190.6 181.8 177.5 Income(loss) used in basic and diluted earnings per share calculation $(4.4) $17.1 $(33.3) $(121.9) RECONCILIATION OF NET LOSS AS REPORTED TO NET INCOME(LOSS) EXCLUDING LICENSE WRITEDOWNS AND SPECIAL ITEMS (2003) AND TAX REFUND (2002) (in millions) Three Months Ended Twelve Months Ended ------------------ ------------------- May 25, May 26, May 25, May 26, 2003 2002 2003 2002 ------- ------- -------- -------- Net income(loss)as reported $ (4.4) $ 17.1 $ (33.3) $(121.9) Add back: Special items - Cost reduction 26.6 - 43.6 - Charge Writedowns of technology licenses - - 13.8 - Deduct: Income tax refund - (11.5) - (11.5) ------- ------- -------- -------- Net income(loss)excluding license writedowns and special items (2003) and tax refund (2002) $ 22.2 $ 5.6 $ 24.1 $(133.4) ======= ======= ======== ======== Net earnings(loss) per share: Basic $0.12 $0.03 $0.13 $(0.75) Diluted $0.12 $0.03 $0.13 $(0.75) Weighted-average shares: Basic 183.0 179.8 181.8 177.5 Diluted 188.2 190.6 185.4 177.5 Income statement detail: Three Months Ended Twelve Months Ended ------------------ ------------------- May 25, May 26, May 25, May 26, 2003 2002 2003 2002 ------- ------- ------- ------- Special items - ------------- In-process reseach and development charges $ 0.0 $ 0.2 $ 0.7 $ 1.3 Cost reduction actions 26.6 8.0 43.6 8.0 ------- ------- ------- ------- Total special items $26.6 $ 8.2 $ 44.3 $ 9.3 ======= ======= ======= ======= Interest income, net - -------------------- Interest income $3.3 $ 5.1 $ 15.6 $25.2 Interest expense (0.2) (0.6) (1.5) (3.9) ------- ------- ------- ------- Interest income, net $3.1 $ 4.5 $ 14.1 $21.3 ======= ======= ======= ======= Other income(expense), net - -------------------------- Net intellectual property income $ 2.6 $ 8.9 $ 6.8 $11.6 Gain(loss)on investments, net (7.4) 0.8 (19.7) 2.1 Other - - - (0.6) ------- ------- ------- ------- Total other income (expense), net $(4.8) $9.7 $(12.9) $13.1 ======= ======= ======= ======= -----END PRIVACY-ENHANCED MESSAGE-----