National Instruments reports Q1 Revenue of $193 Million | Automation.com

National Instruments reports Q1 Revenue of $193 Million

AUSTIN, Texas – April 29, 2008 - National Instruments reported quarterly revenue of $193 million, up 12.4 percent year-over-year. This compares to NI's guidance of between $182 million and $196 million. Net income for Q1 2008 was $17.6 million with diluted earnings per share (EPS) of $0.22.

Non-GAAP net income was $22.0 million with fully diluted EPS of $0.28 at the midpoint of NI's guidance. The company's non-GAAP results exclude the impact of both stock-based compensation and the amortization of acquisition-related intangibles. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.

"We saw strong growth in several key areas of the business, resulting from investments in system-level products, such as our PXI and CompactRIO platforms," said Dr. James Truchard, NI president and CEO. "Large system sales continued to drive revenue growth in Q1 with orders over $20,000 up 34 percent from a year ago. I believe our investments in R&D and our field sales force are important drivers to continuing this trend."

NI virtual instrumentation and graphical system design products, which represents over 90 percent of the company's product portfolio, had 15 percent year-over-year revenue growth in Q1 2008. This represents another quarter of double-digit year-over-year revenue growth from these products and underscores the company's strategy of strong investment in R&D and expanding its field sales force to drive new product success.

Sales of NI instrument control products, which now represent approximately 9 percent of NI revenue, were down 5 percent year-over-year in Q1 2008. This decline is in line with the weakness of the global PMI in Q1 and the company's guidance given in January 2008.

"I am pleased with the continued growth of the company in a tough environment for our industry," said Alex Davern, NI CFO. "We believe our strong product portfolio in addition to the growth of our field sales force will position us well for the eventual recovery in the industrial economy."

Geographically, revenue in U.S. dollar terms for Q1 2008 compared to Q1 2007 was up 7 percent in the Americas, up 14 percent in Europe and up 20 percent in Asia, equaling overall growth of 12.4 percent. In local currency terms, revenue was up 3 percent in Europe and 15 percent in Asia.

Today the company announced that its Board of Directors has approved a new share repurchase plan that increases the number of shares the company is authorized to repurchase by 2.2 million to 3 million shares. In addition, National Instruments announced that the Board of Directors declared a dividend of $0.11 per share on its common stock payable on June 2, 2008, to shareholders of record on May 12, 2008. As of March 31, 2008, the company had $238 million in net cash and short-term investments.

Q1 2008 Highlights
  • Quarterly revenue of $193 million, up 12.4 percent year-over-year
  • Net income of $17.6 million
  • Non-GAAP net income of $22.0 million
  • Strong growth of software, USB data acquisition, distributed I/O, PXI, and RF modular instruments
  • EE Times' presentation of the ACE Award for Small/Medium Company of the Year to NI
  • EDN's presentation of an industry Innovation Award to NI CompactRIO
  • Cash and short-term investments of $238 million
  • New repurchase plan authorizes share repurchase to 3 million shares

    Guidance for Q2 2008
    NI currently expects revenue for Q2 2008 to follow the seasonal pattern of being up from Q1 2008 and to be in the range of between $198 million to $210 million. This is equivalent to growth of between 10 percent and 17 percent year-over-year. Additionally, for Q2 2008, the company expects GAAP fully diluted EPS to be in the range of $0.24 to $0.33 per share. Non-GAAP EPS is expected to be in the range of $0.30 to $0.39 per share. This is consistent with the non-GAAP guidance NI gave in January.

    In Q2 2008, the company expects the impact of stock-based compensation and the impact of the amortization of acquisition-related intangibles, including the recent acquisition of microLEX, to be $0.06 per share. A reconciliation of the company's Q2 2008 guidance on a GAAP basis to its guidance on a non-GAAP basis is included as part of this news release.

    Non-GAAP Earnings Presentation and Non-GAAP Earnings Guidance
    In addition to disclosing results determined in accordance with GAAP, NI also discloses certain non-GAAP operating results that exclude certain charges. In this news release, the company has presented its gross profit, operating margin, net income and diluted EPS results for Q1 2008 and Q1 2007 and its guidance for Q2 2008 on a GAAP and non-GAAP basis. When presenting non-GAAP results, the company includes a reconciliation of the non-GAAP results to the results under GAAP.

    Management believes that including the non-GAAP results assists investors in assessing the company's operational performance and its performance relative to its competitors. The company presents these non-GAAP results as a complement to results provided in accordance with GAAP, and these results should not be regarded as a substitute for GAAP. Management uses these non-GAAP measures to manage and assess the profitability and performance of its business and does not consider stock-based compensation expense or amortization of acquired intangibles that are all non-cash charges in managing its operations. Specifically, management uses non-GAAP measures to plan and forecast future periods, to establish operational goals, to compare with its business plan and individual operating budgets, to measure management performance for purposes of executive compensation including payments to be made under bonus plans, to assist the public in measuring the company's performance relative to the company's long-term public performance goals, to allocate resources and, relative to the company's historical financial performance, to enable comparability between periods.

    Management also considers such non-GAAP results to be an important supplemental measure of its performance. The economic substance behind management's decision to use such non-GAAP measures relates to these charges being non-cash in nature and being a useful measure of the potential future performance of the company's business.

    In line with common industry practice and to help enable comparability with other technology companies, the company's non-GAAP presentation excludes the impact of both stock-based compensation and the amortization of acquisition-related intangibles. Other companies may calculate non-GAAP results differently than the company, limiting its usefulness as a comparative measure. In addition, such non-GAAP measures may exclude financial information that some may consider important in evaluating the company's performance. Management compensates for the foregoing limitations of non-GAAP measures by presenting certain information on both a GAAP and non-GAAP basis and providing reconciliations of these certain GAAP and non-GAAP measures.

    About National Instruments
    National Instruments is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 25,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 10 percent of revenue. Headquartered in Austin, Texas, NI has more than 4,800 employees and direct operations in nearly 40 countries. For the past nine years, FORTUNE magazine has named NI one of the 100 best companies to work for in America.
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