National Instruments Reports Q3 2016 Revenue of $306 Million
Strong Revenue Growth in Software and Record Revenue in RF
Q3 2016 Highlights
-
Revenue of
$306 million , up 2 percent year over year inU.S. dollar terms with core revenue up 4 percent year over year - GAAP gross margin of 75 percent, up 70 basis points year over year
- Non-GAAP gross margin of 75.7 percent, up 30 basis points year over year
-
Fully diluted GAAP EPS of
$0.19 and fully diluted non-GAAP EPS of$0.25 -
Currency volatility in Q3 resulted in a
$0.8 million loss on foreign exchange -
EBITDA of
$46 million -
Cash and short-term investments of
$353 million as ofSept. 30, 2016
In Q3 2016, NI received
GAAP net income for Q3 was
In Q3, GAAP gross margin was 75.0 percent and non-GAAP gross margin was
75.7 percent. Total GAAP operating expenses were
"Over the last decade, we have made the long-term strategic investments
necessary to make NI a company built to last," said
Geographic revenue in
As of
The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions and restructuring charges. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.
Guidance for Q4 2016
NI currently expects Q4 revenue to be in the range of
Non-GAAP Presentation
In addition to disclosing results determined in accordance with GAAP, NI
discloses certain non-GAAP operating results and non-GAAP information
that exclude certain charges. In this news release, the company has
presented its year over year change in core revenue, gross profit, gross
margin, operating expenses, operating income, operating margin, income
before income taxes, provision for income taxes, net income and basic
and fully diluted EPS for the three-month periods ending
When presenting non-GAAP information, the company includes a reconciliation of the non-GAAP results to the GAAP results. 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, amortization of acquisition-related intangibles, acquisition-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions, and restructuring 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 the 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.
This news release discloses the company's EBITDA for the three-month
periods ending
Conference Call Information and Availability of Presentation Materials
Interested parties can listen to the Q3 2016 earnings conference call
with NI management today,
Forward-Looking Statements
This release contains "forward-looking statements" including statements
regarding making NI a company built to last, that the strong
platform-based product offering and ecosystem we have today, coupled
with significant progress in key areas including RF, FPGA and software
puts NI in a strategically differentiated position, being encouraged by
our order growth this quarter, belief that the strong growth in orders
over
The company directs readers to its Form 10-K for the year ended
About NI
Since 1976, NI (www.ni.com) has made it possible for engineers and scientists to solve the world's greatest engineering challenges with powerful, flexible technology solutions that accelerate productivity and drive rapid innovation. Customers from a wide variety of industries - from healthcare to automotive and from consumer electronics to particle physics - use NI's integrated hardware and software platform to improve the world we live in. (NATI-F)
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Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
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2016 | 2015 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 300,652 | $ | 251,129 | ||||||
Short-term investments | 52,277 | 81,789 | ||||||||
Accounts receivable, net | 206,171 | 216,244 | ||||||||
Inventories, net | 196,391 | 185,197 | ||||||||
Prepaid expenses and other current assets | 55,281 | 65,381 | ||||||||
Total current assets | 810,772 | 799,740 | ||||||||
Property and equipment, net | 261,859 | 257,853 | ||||||||
|
261,372 | 257,718 | ||||||||
Intangible assets, net | 110,161 | 108,196 | ||||||||
Other long-term assets | 28,729 | 30,349 | ||||||||
Total assets | $ | 1,472,893 | $ | 1,453,856 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 53,192 | $ | 50,970 | ||||||
Accrued compensation | 31,615 | 27,956 | ||||||||
Deferred revenue - current | 113,645 | 112,283 | ||||||||
Accrued expenses and other liabilities | 23,940 | 11,756 | ||||||||
Other taxes payable | 33,461 | 37,250 | ||||||||
Total current liabilities | 255,853 | 240,215 | ||||||||
Long-term debt | 25,000 | 37,000 | ||||||||
Deferred income taxes | 37,787 | 44,673 | ||||||||
Liability for uncertain tax positions | 10,037 | 11,974 | ||||||||
Deferred revenue - long-term | 28,148 | 27,708 | ||||||||
Other long-term liabilities | 8,657 | 10,565 | ||||||||
Total liabilities | 365,482 | 372,135 | ||||||||
Stockholders' equity: | ||||||||||
Preferred stock | - | - | ||||||||
Common stock | 1,289 | 1,275 | ||||||||
Additional paid-in capital | 758,411 | 717,705 | ||||||||
Retained earnings | 372,893 | 400,831 | ||||||||
Accumulated other comprehensive loss | (25,182 | ) | (38,090 | ) | ||||||
Total stockholders' equity | 1,107,411 | 1,081,721 | ||||||||
Total liabilities and stockholders' equity | $ | 1,472,893 | $ | 1,453,856 | ||||||
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Condensed Consolidated Statements of Income | ||||||||||||||||||||
(in thousands, except per share data, unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Net sales: | ||||||||||||||||||||
Product | $ | 278,521 | $ | 271,683 | $ | 816,486 | $ | 807,064 | ||||||||||||
Software maintenance | 27,843 | 28,129 | 83,161 | 84,053 | ||||||||||||||||
Total net sales | 306,364 | 299,812 | 899,647 | 891,117 | ||||||||||||||||
Cost of sales: | ||||||||||||||||||||
Product | 74,734 | 75,144 | 225,261 | 225,646 | ||||||||||||||||
Software maintenance | 1,998 | 2,022 | 5,126 | 4,531 | ||||||||||||||||
Total cost of sales | 76,732 | 77,166 | 230,387 | 230,177 | ||||||||||||||||
Gross profit | 229,632 | 222,646 | 669,260 | 660,940 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | 116,662 | 114,507 | 346,230 | 335,916 | ||||||||||||||||
Research and development | 59,066 | 52,533 | 178,244 | 168,462 | ||||||||||||||||
General and administrative | 24,537 | 23,255 | 74,308 | 69,391 | ||||||||||||||||
Total operating expenses | 200,265 | 190,295 | 598,782 | 573,769 | ||||||||||||||||
Operating income | 29,367 | 32,351 | 70,478 | 87,171 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 276 | 396 | 787 | 1,089 | ||||||||||||||||
Net foreign exchange (loss) gain | (760 | ) | 286 | (1,471 | ) | (1,965 | ) | |||||||||||||
Other (expense) income, net | 301 | 133 | (2,052 | ) | 787 | |||||||||||||||
Income before income taxes | 29,184 | 33,166 | 67,742 | 87,082 | ||||||||||||||||
Provision for income taxes | 4,695 | 9,988 | 14,155 | 23,958 | ||||||||||||||||
Net income | $ | 24,489 | $ | 23,178 | $ | 53,587 | $ | 63,124 | ||||||||||||
Basic earnings per share | $ | 0.19 | $ | 0.18 | $ | 0.42 | $ | 0.49 | ||||||||||||
Diluted earnings per share | $ | 0.19 | $ | 0.18 | $ | 0.42 | $ | 0.49 | ||||||||||||
Weighted average shares outstanding - | ||||||||||||||||||||
basic | 128,815 | 127,935 | 128,233 | 128,219 | ||||||||||||||||
diluted | 129,047 | 128,229 | 128,738 | 128,856 | ||||||||||||||||
Dividends declared per share | $ | 0.20 | $ | 0.19 | $ | 0.60 | $ | 0.57 | ||||||||||||
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Condensed Consolidated Statements of Cash Flows | ||||||||||
(in thousands, unaudited) | ||||||||||
Nine Months Ended |
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2016 | 2015 | |||||||||
Cash flow from operating activities: | ||||||||||
Net income | $ | 53,587 | $ | 63,124 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 55,164 | 55,157 | ||||||||
Stock-based compensation | 19,635 | 19,151 | ||||||||
Tax expense/(benefit) expense from deferred income taxes | (7,321 | ) | (7,404 | ) | ||||||
Tax benefit from stock option plans | (439 | ) | (944 | ) | ||||||
Net change in operating assets and liabilities | 32,454 | (8,603 | ) | |||||||
Net cash provided by operating activities | 153,080 | 120,481 | ||||||||
Cash flow from investing activities: | ||||||||||
Capital expenditures | (34,408 | ) | (28,102 | ) | ||||||
Capitalization of internally developed software | (24,048 | ) | (22,639 | ) | ||||||
Additions to other intangibles | (1,969 | ) | (2,240 | ) | ||||||
Acquisitions, net of cash received | (549 | ) | (28,629 | ) | ||||||
Purchases of short-term investments | (9,054 | ) | (29,649 | ) | ||||||
Sales and maturities of short-term investments | 38,566 | 44,752 | ||||||||
Net cash used by investing activities | (31,462 | ) | (66,507 | ) | ||||||
Cash flow from financing activities: | ||||||||||
Proceeds from revolving line of credit | 15,000 | 42,000 | ||||||||
Principal payments on revolving line of credit | (27,000 | ) | (17,000 | ) | ||||||
Proceeds from issuance of common stock | 22,157 | 21,252 | ||||||||
Repurchase of common stock | (5,635 | ) | (72,559 | ) | ||||||
Dividends paid | (77,056 | ) | (73,406 | ) | ||||||
Tax benefit from stock option plans | 439 | 944 | ||||||||
Net cash used by financing activities | (72,095 | ) | (98,769 | ) | ||||||
Net change in cash and cash equivalents | 49,523 | (44,795 | ) | |||||||
Cash and cash equivalents at beginning of period | 251,129 | 274,030 | ||||||||
Cash and cash equivalents at end of period | $ | 300,652 | $ | 229,235 | ||||||
The following tables provide details with respect to the amount of GAAP charges related to stock-based compensation, amortization of acquisition intangibles, acquisition related transaction costs, restructuring charges, foreign exchange loss on acquisitions and taxes levied on the transfer of acquired intellectual property that were recorded in the line items indicated below (unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||
Cost of sales | $ | 556 | $ | 499 | $ | 1,643 | $ | 1,427 | |||||||||||||
Sales and marketing | 2,635 | 2,854 | 8,422 | 8,303 | |||||||||||||||||
Research and development | 2,027 | 2,132 | 6,745 | 6,764 | |||||||||||||||||
General and administrative | 921 | 921 | 2,764 | 2,656 | |||||||||||||||||
Provision for income taxes | (2,092 | ) | (1,933 | ) | (6,202 | ) | (5,420 | ) | |||||||||||||
Total | $ | 4,047 | $ | 4,473 | $ | 13,372 | $ | 13,730 | |||||||||||||
Amortization of acquisition intangibles | |||||||||||||||||||||
Cost of sales | $ | 1,599 | $ | 2,643 | $ | 7,621 | $ | 7,858 | |||||||||||||
Sales and marketing | 502 | 423 | 2,141 | 1,299 | |||||||||||||||||
Research and development | 276 | 322 | 815 | 983 | |||||||||||||||||
Other income, net | - | 145 | - | 448 | |||||||||||||||||
Provision for income taxes | 854 | (1,152 | ) | 1,312 | (3,469 | ) | |||||||||||||||
Total | $ | 3,231 | $ | 2,381 | $ | 11,889 | $ | 7,119 | |||||||||||||
Acquisition transaction costs, restructuring charges, and other | |||||||||||||||||||||
Cost of sales | $ | 74 | $ | 169 | $ | 253 | $ | 974 | |||||||||||||
Sales and marketing | 42 | - | 141 | - | |||||||||||||||||
Research and development | 236 | - | 648 | - | |||||||||||||||||
General and administrative | 97 | 238 | 317 | 442 | |||||||||||||||||
Foreign exchange gain (loss) 1 | - | - | 94 | - | |||||||||||||||||
Other income (loss), net2 | - | - | 2,475 | - | |||||||||||||||||
Provision for income taxes | (156 | ) | (59 | ) | (1,358 | ) | (390 | ) | |||||||||||||
Total | $ | 293 | $ | 348 | $ | 2,570 | $ | 1,026 | |||||||||||||
(1) Foreign exchange losses on acquisitions were |
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(2) Taxes levied on the transfer of acquired intellectual property
were |
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Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit | |||||||||||||||||||||
Gross profit, as reported | $ | 229,632 | $ | 222,646 | $ | 669,260 | $ | 660,940 | |||||||||||||
Stock-based compensation | 556 | 499 | 1,643 | 1,427 | |||||||||||||||||
Amortization of acquisition intangibles | 1,599 | 2,643 | 7,621 | 7,858 | |||||||||||||||||
Acquisition transaction costs and restructuring charges | 74 | 169 | 253 | 974 | |||||||||||||||||
Non-GAAP gross profit | $ | 231,861 | $ | 225,957 | $ | 678,777 | $ | 671,199 | |||||||||||||
Non-GAAP gross margin | 75.7 | % | 75.4 | % | 75.4 | % | 75.3 | % | |||||||||||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||||||||
Operating expenses, as reported | $ | 200,265 | $ | 190,295 | $ | 598,782 | $ | 573,769 | |||||||||||||
Stock-based compensation | (5,583 | ) | (5,907 | ) | (17,931 | ) | (17,723 | ) | |||||||||||||
Amortization of acquisition intangibles | (778 | ) | (745 | ) | (2,956 | ) | (2,282 | ) | |||||||||||||
Acquisition transaction costs and restructuring charges | (375 | ) | (238 | ) | (1,106 | ) | (442 | ) | |||||||||||||
Non-GAAP operating expenses | $ | 193,529 | $ | 183,405 | $ | 576,789 | $ | 553,322 | |||||||||||||
Reconciliation of Operating Income to Non-GAAP Operating Income | |||||||||||||||||||||
Operating income, as reported | $ | 29,367 | $ | 32,351 | $ | 70,478 | $ | 87,171 | |||||||||||||
Stock-based compensation | 6,139 | 6,406 | 19,574 | 19,150 | |||||||||||||||||
Amortization of acquisition intangibles | 2,377 | 3,388 | 10,577 | 10,140 | |||||||||||||||||
Acquisition transaction costs and restructuring charges | 449 | 407 | 1,359 | 1,416 | |||||||||||||||||
Non-GAAP operating income | $ | 38,332 | $ | 42,552 | $ | 101,988 | $ | 117,877 | |||||||||||||
Non-GAAP operating margin | 12.5 | % | 14.2 | % | 11.3 | % | 13.2 | % | |||||||||||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes | |||||||||||||||||||||
Income before income taxes, as reported | $ | 29,184 | $ | 33,166 | $ | 67,742 | $ | 87,082 | |||||||||||||
Stock-based compensation | 6,139 | 6,406 | 19,574 | 19,150 | |||||||||||||||||
Amortization of acquisition intangibles | 2,377 | 3,533 | 10,577 | 10,588 | |||||||||||||||||
Acquisition transaction costs and restructuring charges | 449 | 407 | 1,359 | 1,416 | |||||||||||||||||
Foreign exchange loss on acquisitions | - | - | 94 | - | |||||||||||||||||
Taxes levied on transfer of acquired intellectual property | - | - | 2,474 | - | |||||||||||||||||
Non-GAAP income before income taxes | $ | 38,149 | $ | 43,512 | $ | 101,820 | $ | 118,236 | |||||||||||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes | |||||||||||||||||||||
Provision for income taxes, as reported | $ | 4,695 | $ | 9,988 | $ | 14,155 | $ | 23,958 | |||||||||||||
Stock-based compensation | 2,092 | 1,933 | 6,202 | 5,420 | |||||||||||||||||
Amortization of acquisition intangibles | (854 | ) | 1,152 | (1,312 | ) | 3,469 | |||||||||||||||
Acquisition transaction costs, restructuring charges, and other | 156 | 59 | 1,358 | 390 | |||||||||||||||||
Non-GAAP provision for income taxes | $ | 6,089 | $ | 13,132 | $ | 20,403 | $ | 33,237 | |||||||||||||
Reconciliation of GAAP Net Income, Basic EPS and Diluted EPS to Non-GAAP Net Income, Non-GAAP Basic EPS and Non-GAAP Diluted EPS | |||||||||||||||||
(in thousands, except per share data, unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
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2016 | 2015 | 2016 | 2015 | ||||||||||||||
Net income, as reported | $ | 24,489 | $ | 23,178 | $ | 53,587 | $ | 63,124 | |||||||||
Adjustments to reconcile net income to non-GAAP net income: | |||||||||||||||||
Stock-based compensation, net of tax effect | 4,047 | 4,473 | 13,372 | 13,730 | |||||||||||||
Amortization of acquisition intangibles, net of tax effect | 3,231 | 2,381 | 11,889 | 7,119 | |||||||||||||
Acquisition transaction costs, restructuring, and other, net of tax effect | 293 | 348 | 2,570 | 1,026 | |||||||||||||
Non-GAAP net income | $ | 32,060 | $ | 30,380 | $ | 81,418 | $ | 84,999 | |||||||||
Basic EPS, as reported | $ | 0.19 | $ | 0.18 | $ | 0.42 | $ | 0.49 | |||||||||
Adjustment to reconcile basic EPS to non-GAAP basic EPS: |
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Impact of stock-based compensation, net of tax effect | 0.03 | 0.04 | 0.10 | 0.11 | |||||||||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.03 | 0.02 | 0.09 | 0.06 | |||||||||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect | - | - | 0.02 | - | |||||||||||||
Non-GAAP basic EPS | $ | 0.25 | $ | 0.24 | $ | 0.63 | $ | 0.66 | |||||||||
Diluted EPS, as reported | $ | 0.19 | $ | 0.18 | $ | 0.42 | $ | 0.49 | |||||||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS | |||||||||||||||||
Impact of stock-based compensation, net of tax effect | 0.03 | 0.04 | 0.10 | 0.11 | |||||||||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.03 | 0.02 | 0.09 | 0.06 | |||||||||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect | - | - | 0.02 | - | |||||||||||||
Non-GAAP diluted EPS | $ | 0.25 | $ | 0.24 | $ | 0.63 | $ | 0.66 | |||||||||
Weighted average shares outstanding - | |||||||||||||||||
Basic | 128,815 | 127,935 | 128,233 | 128,219 | |||||||||||||
Diluted | 129,047 | 128,229 | 128,738 | 128,856 | |||||||||||||
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Reconciliation of Net Income to EBITDA | |||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
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2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Net income, as reported | $ | 24,489 | $ | 23,178 | $ | 53,587 | $ | 63,124 | |||||||||||||
Adjustments to reconcile net income to EBITDA: | |||||||||||||||||||||
Interest income | (53 | ) | (396 | ) | (194 | ) | (1,089 | ) | |||||||||||||
Tax expense | 4,695 | 9,988 | 14,155 | 23,958 | |||||||||||||||||
Depreciation and amortization | 16,947 | 18,655 | 55,164 | 55,157 | |||||||||||||||||
EBITDA | $ | 46,078 | $ | 51,425 | $ | 122,712 | $ | 141,150 | |||||||||||||
Weighted average shares outstanding - Diluted | 129,047 | 128,229 | 128,738 | 128,856 | |||||||||||||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Three months ended | |||||||||||||||||||||
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Low | High | ||||||||||||||||||||
GAAP Fully Diluted EPS, guidance | $ | 0.24 | $ | 0.36 | |||||||||||||||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS: |
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Impact of stock-based compensation, net of tax effect | 0.04 | 0.04 | |||||||||||||||||||
Impact of amortization of acquisition intangibles and acquisition accounting adjustments, net of tax effect | 0.04 | 0.04 | |||||||||||||||||||
Non-GAAP diluted EPS, guidance | $ | 0.32 | $ | 0.44 | |||||||||||||||||
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Reconciliation of GAAP Revenue Growth to Core Revenue Growth | |||||
(unaudited) | |||||
Three Months Ended, | |||||
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2016 | |||||
YoY GAAP revenue growth, as reported | $ | 2 | % | ||
Effect of excluding our current largest customer | -1 | % | |||
YoY GAAP revenue growth, excluding our largest customer | 1 | % | |||
Effect of excluding the impact of foreign currency exchange | 3 | % | |||
YoY Core revenue growth | $ | 4 | % | ||
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Reconciliation of GAAP Revenue Growth Guidance to Core Revenue Growth Guidance | |||||
(unaudited) | |||||
Three Months Ended | |||||
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2016 | |||||
Estimated YoY GAAP revenue growth, as reported | $ | 1 | % | ||
Estimated effect of excluding our current largest customer | 2 | % | |||
Estimated YoY GAAP revenue growth, excluding our largest customer | 3 | % | |||
Estimated effect of excluding the impact of foreign currency exchange | 2 | % | |||
Estimated YoY Core revenue growth | $ | 5 | % |
View source version on businesswire.com: http://www.businesswire.com/news/home/20161027006767/en/
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