National Instruments Reports 20 Percent Year-Over-Year Revenue Growth
Company Delivers Record Software Sales and Launches Significant New Products in Q3 AUSTIN, Texas -- Oct. 26, 2004 -- National Instruments (Nasdaq: NATI) reported third quarter revenue of $125 million, an increase of 20 percent compared to the third quarter of 2003, as well as the company's ninth consecutive quarter of year-over-year revenue growth. Net income under generally accepted accounting principles (GAAP) for Q3 2004 was $7.9 million, representing diluted earnings per share (EPS) of 10 cents. This compares to net income of $8 million and diluted EPS of 10 cents in Q3 2003.Pro forma adjusted net income for Q3 2004 was $9.9 million, which represented diluted EPS of 12 cents compared to the pro forma adjusted net income of $8.2 million and diluted EPS of 10 cents in Q3 2003. Pro forma net income and diluted EPS for each third quarter period excludes the effects of patent litigation costs. These charges are set forth in the reconciliation of GAAP to non-GAAP financial measures table included below. Patent litigation costs in Q3 2004 include a $2.5 million charge to accrue for the additional expected patent litigation costs of taking the company's current patent litigation with SoftWIRE Technology, LLC to trial in 2006. This incremental charge resulted from a decision by the court on Oct. 6, 2004, to delay the trial and was not included in the company's previous guidance of fully diluted EPS of 11 cents for Q3 2004. The company also announced a quarterly dividend of 5 cents per share on its common stock payable on Nov. 29, 2004, to shareholders of record on Nov. 8, 2004. As of Sept. 30, 2004, the company had $200 million in cash and short-term investments. During the quarter, the company repurchased approximately 251,000 shares of common stock for $6.7 million and paid a dividend of $3.9 million. "We continued our aggressive investment in R&D in Q3 and introduced significant new products at NIWeek, including our new NI M Series family of data acquisition devices, two new 200 MS/s PXI modular instruments, and the CompactRIO embedded control system platform," said NI president and CEO Dr. James Truchard. "Strong sales of software, PXI and modular instruments during the quarter demonstrate the mainstream acceptance of virtual instrumentation in test, and we are excited about our growing opportunities in industrial control and design." Q3 2004 Highlights-Revenue growth of 20 percent year-over-year -Pro forma net income up 20 percent year-over-year -Record quarter for software sales -Successful NIWeek with record attendance and record number of exhibitors -New M Series products that lead the industry with more performance, I/O capabilities and value to customers -Strong growth in PXI led by modular instruments and switch products with the launch of two new 200 MS/s modular instruments -Introduction of CompactRIO, a new rugged, ultrahigh-performance platform for industrial control -Release of SignalExpress, an interactive software environment for design engineers -Disciplined expense management by employees "The strong growth of our newer products shows that our strategy of increased investment in R&D paid off as our order growth outpaced our peers," said NI CFO Alex Davern. "We expect to see sequential revenue growth and a record revenue quarter in Q4."Geographically, the growth of revenue in U.S. dollar terms for Q3 2004 compared to Q3 2003 was up 23 percent in the Americas, up 15 percent in Europe and up 19 percent in Asia, equaling overall growth of 20 percent. In local currency terms, revenue was up 5 percent in Europe, up 16 percent in Asia and up 23 percent in the Americas for an overall local currency growth of 16 percent. NI anticipates Q4 revenue to increase sequentially to a new quarterly revenue record. In addition, the company estimates fully diluted earnings per share of between 16 cents and 20 cents for Q4 2004.Interested parties can listen to a conference call today, Oct. 26, 2004, beginning at 4:00 p.m. CDT, at www.ni.com/call. Replay information will be available by calling (719) 457-0820, confirmation code #893468, from Oct. 26, 2004, at 7:00 p.m. CDT, through Nov. 2, 2004, at 12:00 a.m. CST. This release contains "forward-looking statements," including statements regarding strong growth of newer products, mainstream acceptance of virtual instrumentation, excitement about growth opportunities, sequential revenue growth and record revenue for Q4 and earnings per share of 16 cents to 20 cents in Q4 2004. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes in the global economy, delays in the release of new products, the ability to control expenses, fluctuations in customer demand for NI products, manufacturing inefficiencies and foreign exchange fluctuations. Actual results may differ materially from the expected results. The company directs readers to documents filed with the SEC for other risks associated with the company's future performance.About National InstrumentsNational Instruments (www.ni.com) is a technology pioneer and leader in virtual instrumentation -- a revolutionary concept that has changed the way engineers and scientists in industry, government and academia approach measurement and automation. Leveraging the PC and its related technologies, virtual instrumentation increases productivity and lowers costs through easy-to-integrate software, such as the NI LabVIEW graphical development environment, and modular hardware, such as PXI modules for data acquisition, instrument control and machine vision. Headquartered in Austin, Texas, NI has more than 3,300 employees and direct operations in 41 countries. In 2003, the company sold products to more than 25,000 companies in 90 countries. For the past five years, FORTUNE magazine named NI one of the 100 best companies to work for in America. Readers may obtain investment information from the company's investor relations department by calling (512) 683-5090, by sending e-mail to email@example.com or by visiting ni.com/nati.
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