Press Release Details

National Instruments Reports Record Annual and Quarterly Revenue

AUSTIN, Texas, Jan. 31, 2013 /PRNewswire/ --

Q4 2012 Highlights

  • Record revenue of $300 million, up 8 percent year-over-year on a GAAP basis and 7 percent year-over-year on a non-GAAP basis
  • GAAP gross margin of 75.2 percent and non-GAAP gross margin of 76.0 percent
  • Fully diluted GAAP EPS of $0.17
  • Fully diluted non-GAAP EPS of $0.29
  • EBITDA of $45 million, or $0.37 per share
  • $335 million in cash and short-term investments as of Dec. 31, 2012

National Instruments (Nasdaq: NATI) today announced record Q4 revenue of $300 million, an increase of 8 percent year-over-year on a GAAP basis and up 7 percent year-over-year on a non-GAAP basis. In Q4, orders between $20,000 and $100,000 were up by 6 percent year-over-year while orders over $100,000 grew 37 percent year-over-year. The company's orders less than $20,000 decreased by 1 percent year-over-year, reflecting the continued weakness in the Global PMI in Q4.

GAAP net income was $21 million in Q4, with fully diluted earnings per share (EPS) of $0.17. Included in the GAAP results is a $6.8 million, or $0.06 per share, adjustment to the acquisition earn-out accrual related to NI's acquisition of AWR in June 2011. This increase in the accrual is a result of AWR's performance exceeding the company's prior expectations.

Non-GAAP net income for Q4 was $35 million, with non-GAAP fully diluted EPS of $0.29. The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition earn-out accrual, and acquisition-related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.

A significant contributor to National Instruments' success this year was winning the largest application sale in the history of the company. This application involves the use of NI LabVIEW system design software and the NI PXI hardware platform to rapidly develop a production test solution. In 2012, National Instruments received $59 million in orders for this application, and the company believes it will receive significant future orders from this customer during 2013.

"Since we founded the company in 1976, the role NI technology plays in building measurement systems has evolved substantially to best fit the changing needs of our customers," said Dr. James Truchard, NI president, CEO and co-founder. "I remain optimistic that our differentiated approach through graphical system design, the industry shift away from rack-and-stack to a modular approach and our on-going commitment to customer success continue to set National Instruments apart from others in our industry."

As the company previously announced, on Oct. 1, 2012, National Instruments created a new geographical territory in Asia, resulting in four regions: Americas, Europe, East Asia and Emerging Markets.  Geographically, revenue in U.S. dollar terms for Q4 2012 compared to Q4 2011 was up 3 percent in the Americas, down 8 percent in Europe, up 24 percent in East Asia and up 42 percent in Emerging Markets. In local currency terms, revenue was down 5 percent in Europe, up 25 percent in East Asia and up 33 percent in Emerging Markets. 

As of Dec. 31, NI had $335 million in cash and short-term investments, decreasing by $29 million from Q3. During the quarter, National Instruments paid $25 million for several acquisitions, including Signalion; distributed $17 million for dividends; and invested $10 million in the completion of its new manufacturing facility and the purchase of additional property. The National Instruments Board of Directors approved a quarterly dividend of $0.14 per share on the company's common stock payable on March 11 to shareholders of record on Feb. 19.

FY 2012 Highlights

  • Record revenue of $1.14 billion, up 12 percent year-over-year on a GAAP basis and up 10 percent year-over-year on a non-GAAP basis
  • GAAP gross margin of 75.5 percent
  • Non-GAAP gross margin of 76.4 percent
  • GAAP operating margin of 10 percent
  • Non-GAAP operating margin of 14.4 percent
  • Fully diluted GAAP EPS of $0.73
  • Fully diluted non-GAAP EPS of $1.03
  • Record annual revenue for PXI, CompactRIO and CompactDAQ products
  • NI named to the Great Place to Work® Institute's 25 Best Multinational Companies to Work For list for the second consecutive year and its 100 Best Companies to Work For list for the 14th consecutive year 

Full-year 2012 revenue was $1.14 billion, up 12 percent year-over-year on a GAAP basis and up 10 percent year-over-year on a non-GAAP basis.  GAAP net income for 2012 was $90 million, with fully diluted GAAP EPS of $0.73, and non-GAAP net income was $127 million, with non-GAAP fully diluted EPS of $1.03.

"We believe our ability to grow revenue and maintain our operating profit in 2012, despite significant economic headwinds, demonstrated the strength of our disruptive approach," said Alex Davern, EVP, COO and CFO. "Our goals for 2013 are to continue to leverage the investments we have already made to drive sustained revenue growth and to continue to drive toward our long-term target of 18 percent non-GAAP operating income."

Guidance for Q1 2013

The company continues to be cautious in planning for 2013 and anticipates the Global PMI to remain weak through Q2. NI currently expects Q1 revenue to be between $276 million and $296 million. The company expects fully diluted GAAP EPS between $0.12 and $0.22, with non-GAAP fully diluted EPS expected to be between $0.19 and $0.29. Included in the guidance for Q1 is a $0.03 per share benefit from the recognition of the 2012 benefit of the R&D tax credit in Q1 2013.

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 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- and 12-month periods ending Dec. 31, 2012 and 2011, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP fully diluted EPS. 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 accounting for deferred revenue, adjustments related to the company's contract dispute with the GSA, acquisition-related adjustments and acquisition-related transaction costs 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 also discloses the company's earnings before interest, taxes, depreciation and amortization (EBITDA) and EBITDA diluted EPS for the three- and 12-month periods ended Dec. 31, 2012 and 2011. The company believes that including the EBITDA results assists investors in assessing the company's operational performance relative to its competitors. A reconciliation of EBITDA and EBITDA diluted EPS to GAAP net income and GAAP diluted EPS is included with this news release.

Conference Call Information
Interested parties can listen to the Q4 2012 conference call today, Jan. 31, beginning at 4:00 p.m. CST, at ni.com/call. Additionally, a replay will be available shortly after the call ends through Feb. 5 at 7:00 p.m. CST by calling (855) 859-2056, confirmation code #85756419, or by visiting the company's website at ni.com/call.

Forward-Looking Statements
This release contains "forward-looking statements," including statements related to the company's belief it will receive significant future orders from a large customer during 2013, remaining optimistic that its differentiated approach sets NI apart from others in the industry; the strength of the company's disruptive approach; the company's goals for 2013; NI's drive toward its long-term target of 18 percent non-GAAP operating income; anticipated weakness in the Global PMI through Q2; and NI's Q1 guidance for revenue, GAAP and non-GAAP EPS, and expected benefit from the 2012 R&D tax credit. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, component shortages, delays in the release of new products, fluctuations in customer demand for NI products, the company's ability to effectively manage its operating expenses, manufacturing inefficiencies, adjustments to acquisition earn-out accruals, foreign exchange fluctuations and the impact of NI's recent and any future acquisitions. Actual results may differ materially from the expected results.

The company directs readers to its Form 10-K for the fiscal year ended Dec. 31, 2011, its Form 10-Q for the quarter ended Sept. 30, 2012, and the other documents it files with the SEC for other risks associated with the company's future performance.

About National Instruments
Since 1976, National Instruments (www.ni.com) has equipped engineers and scientists with tools that accelerate productivity, innovation and discovery. NI's graphical system design approach to engineering provides an integrated software and hardware platform that speeds the development of any system needing measurement and control. The company's long-term vision and focus on improving society through its technology supports the success of its customers, employees, suppliers and shareholders. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, emailing nati@ni.com or visiting www.ni.com/nati. (NATI-F)

CompactRIO, LabVIEW, National Instruments, NI and ni.com are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies.

 

Contact:

Caitlin Gursslin


Investor Relations


(512) 683-8456

 

 





National Instruments

Consolidated Balance Sheets

(in thousands)








Dec. 31, 2012


Dec. 31,



(unaudited)


2011

Assets





Current assets:





Cash and cash equivalents

$

161,996

$

142,608

Short-term investments


173,166


223,504

Accounts receivable, net


187,060


157,056

Inventories, net


169,990


131,995

Prepaid expenses and other current assets


48,009


38,082

Deferred income taxes, net


27,479


26,304

Total current assets


767,700


719,549






Property and equipment, net


249,721


190,148

Goodwill


147,258


130,747

Intangible assets, net


93,913


83,866

Other long-term assets


26,177


29,984

Total assets

$

1,284,769

$

1,154,294






Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable

$

65,080

$

41,111

Accrued compensation


29,978


29,616

Deferred revenue — current


90,714


80,059

Accrued expenses and other liabilities


34,373


37,612

Other taxes payable


24,811


24,507

Total current liabilities


244,956


212,905






Deferred income taxes


47,630


43,186

Liability for uncertain tax positions


20,920


19,494

Deferred revenue — long-term


20,446


10,015

Other long-term liabilities


11,689


16,683

Total liabilities

$

345,641

$

302,283






Stockholders' equity:





Preferred stock

$

-

$

-

Common stock


1,229


1,207

Additional paid-in capital


532,845


471,830

Retained earnings


404,210


382,474

Accumulated other comprehensive income (loss)


844


(3,500)

Total stockholders' equity

$

939,128

$

852,011

Total liabilities and stockholders' equity

$

1,284,769

$

1,154,294






National Instruments

Consolidated Statements of Income

(in thousands, except per share data)












Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



(Unaudited)


(Unaudited)



2012


2011


2012


2011

Net sales:









Product

$

278,641

$

256,606

$

1,054,849

$

955,613

Software maintenance


21,685


21,445


87,494


81,667

GSA accrual


-


-


1,349


(13,107)

Total net sales


300,326


278,051


1,143,692


1,024,173










Cost of sales:









Product

$

73,465

$

66,499

$

274,839

$

235,839

Software maintenance


1,116


888


5,435


5,125

Total cost of sales


74,581


67,387


280,274


240,964










Gross profit

$

225,745

$

210,664

$

863,418

$

783,209










Operating expenses:









Sales and marketing

$

111,447

$

102,221

$

431,468

$

388,768

Research and development


58,066


54,502


222,994


199,071

General and administrative


21,649


21,439


85,239


82,658

Acquisition-related adjustment


6,783


-


6,783


-

Total operating expenses

$

197,945

$

178,162

$

746,484

$

670,497










Operating income

$

27,800

$

32,502

$

116,934

$

112,712










Other income (expense):









Interest income

$

221

$

280

$

716

$

1,319

Net foreign exchange (loss)


(107)


(1,338)


(2,246)


(2,755)

Other income, net


77


78


(567)


(142)










Income before income taxes

$

27,991

$

31,522

$

114,837

$

111,134










Provision for (benefit from) income taxes


7,278


7,195


24,700


17,062










Net income

$

20,713

$

24,327

$

90,137

$

94,072










Basic earnings per share

$

0.17

$

0.20

$

0.74

$

0.79

Diluted earnings per share

$

0.17

$

0.20

$

0.73

$

0.78










Weighted average shares outstanding —









Basic


122,754


120,582


121,973


119,836

Diluted


123,375


121,453


122,977


121,220










Dividends declared per share

$

0.14

$

0.10

$

0.56

$

0.40

















National Instruments

Consolidated Statements of Cash Flows

(in thousands)



12 Months Ended



Dec. 31,



(Unaudited)



2012


2011

Cash flow from operating activities:





Net income

$

90,137

$

94,072

Adjustments to reconcile net income to net cash provided





by operating activities:





Depreciation and amortization


58,686


49,897

Stock-based compensation


27,796


23,219

Tax expense (benefit) from deferred income taxes


1,853


(8,581)

Tax (benefit) from stock option plans


(2,198)


(5,151)

Changes in operating assets and liabilities:





Accounts receivable


(26,007)


(21,957)

Inventories


(36,154)


(11,817)

Prepaid expenses and other assets


(7,037)


(1,350)

Accounts payable


23,419


5,573

Deferred revenue


604


16,953

Taxes and other liabilities


1,417


29,041

Net cash provided by operating activities

$

132, 516

$

169,899






Cash flow from investing activities:





Capital expenditures


(89,073)


(54,830)

Capitalization of internally developed software


(11,721)


(12,065)

Additions to other intangibles


(1,890)


(5,035)

Acquisitions, net of cash received


(25,481)


(73,558)

Purchases of short-term investments


(188,098)


(257,449)

Sales and maturities of short-term investments


238,436


166,104

Net cash provided/(used) by investing activities

$

(77,827)

$

(236,833)






Cash flow from financing activities:





Proceeds from issuance of common stock


30,902


32,905

Dividends paid


(68,401)


(47,961)

Tax benefit from stock option plans


2,198


5,151

Net cash used by financing activities

$

(35,301)

$

(9,905)






Net change in cash and cash equivalents


19,388


(76,839)

Cash and cash equivalents at beginning of period


142,608


219,447

Cash and cash equivalents at end of period

$

161,996

$

142,608






Detail of GAAP Charges Related to Revenue, Stock-Based Compensation,

Amortization of Acquisition Intangibles and Acquisition-Related Transaction Costs

(in thousands)

(unaudited)











Three Months Ended

12 Months Ended



Dec. 31,

Dec. 31,



2012


2011


2012


2011

Revenue









Acquisition-related deferred revenue

$

-

$

1,912

$

2,156

$

4,730

GSA accrual


-


-


(1,349)


13,107

Provision for income taxes


-


(669)


(282)


(6,242)

Total

$

-

$

1,243

$

525

$

11,595










Stock-based compensation









Cost of sales

$

430

$

411

$

1,719

$

1,527

Sales and marketing


3,033


2,702


11,612


9,711

Research and development


2,919


2,625


10,909


8,870

General and administrative


908


831


3,556


3,111

Provision for income taxes


(2,193)


(2,041)


(7,579)


(6,827)

Total

$

5,097

$

4,528

$

20,217

$

16,392



















Amortization of acquisition intangibles









Cost of sales

$

2,165

$

2,469

$

8,926

$

7,064

Sales and marketing


476


447


1,819


1,071

Research and development


217


-


217


-

Other income, net


194


190


765


955

Provision for income taxes


(964)


(993)


(3,717)


(2,736)

Total

$

2,088

$

2,113

$

8,010

$

6,354










Acquisition-related transaction costs









Cost of sales

$

(56)

$

32

$

(24)

$

54

Sales and marketing


177


220


606


1,349

Research and development


165


106


360


176

General and administrative


355


47


393


505

Acquisition-related adjustment


6,783


-


6,783


-

Provision for income taxes


(105)


(142)


(348)


(288)

Total

$

7,319

$

263

$

7,770

$

1,796






National Instruments

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share data)

(unaudited)












Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2012


2011


2012


2011

Reconciliation of Net Sales to Non-GAAP Net Sales





Net sales, as reported

$

300,326

$

278,051

$

1,143,692

$

1,024,173

Acquisition-related deferred revenue


-


1,912


2,156


4,730

GSA accrual


-


-


(1,349)


13,107

Non-GAAP net sales

$

300,326

$

279,963

$

1,144,499

$

1,042,010










Reconciliation of Gross Profit to Non-GAAP Gross Profit





Gross profit, as reported

$

225,745

$

210,664

$

863,418

$

783,209

Acquisition-related deferred revenue and GSA accrual


-


1,912


807


17,837

Stock-based compensation


430


411


1,719


1,527

Amortization of acquisition intangibles


2,165


2,469


8,926


7,064

Acquisition-related transaction costs


(56)


32


(24)


54

Non-GAAP gross profit

$

228,284

$

215,488

$

874,846

$

809,691

   Non-GAAP gross margin


76%


77%


76%


78%









Reconciliation of Operating Expenses to Non-GAAP Operating Expenses





Operating expenses, as reported

$

197,945

$

178,162

$

746,484

$

670,497

Stock-based compensation


(6,860)


(6,158)


(26,077)


(21,692)

Amortization of acquisition intangibles


(693)


(447)


(2,036)


(1,071)

Acquisition-related adjustment


(6,783)


-


(6,783)


-

Acquisition-related transaction costs


(697)


(373)


(1,359)


(2,030)

Non-GAAP operating expenses

$

182,912

$

171,184

$

710,229

$

645,704









Reconciliation of Operating Income to Non-GAAP Operating Income





Operating income, as reported

$

27,800

$

32,502

$

116,934

$

112,712

Acquisition-related deferred revenue and GSA accrual


-


1,912


807


17,837

Stock-based compensation


7,290


6,569


27,796


23,219

Amortization of acquisition intangibles


2,858


2,916


10,962


8,135

Acquisition-related adjustment


6,783


-


6,783


-

Acquisition-related transaction costs


641


405


1,335


2,084

Non-GAAP operating income

$

45,372

$

44,304

$

164,617

$

163,987

   Non-GAAP operating margin


15%


16%


14%


16%









Reconciliation of Income Before Income Taxes to Non-GAAP Income Before Income Taxes



Income before income taxes, as reported

$

27,991

$

31,522

$

114,837

$

111,134

Acquisition-related deferred revenue and GSA accrual


-


1,912


807


17,837

Stock-based compensation


7,290


6,569


27,796


23,219

Amortization of acquisition intangibles


3,052


3,106


11,727


9,090

Acquisition-related adjustment


6,783


-


6,783


-

Acquisition-related transaction costs


641


405


1,335


2,084

Non-GAAP income before income taxes

$

45,757

$

43,514

$

163,285

$

163,364









Reconciliation of Provision for Income Taxes to Non-GAAP Provision for Income Taxes



Provision for (benefit from) income taxes, as reported

$

7,278

$

7,195

$

24,700

$

17,062

Acquisition-related deferred revenue and GSA accrual


-


669


282


6,242

Stock-based compensation


2,193


2,041


7,579


6,827

Amortization of acquisition intangibles


964


993


3,717


2,736

Acquisition-related transaction costs


105


142


348


288

Non-GAAP provision for income taxes

$

10,540

$

11,040

$

36,626

$

33,155







Reconciliation of GAAP Net Income, Basic EPS and Diluted EPS to Non-GAAP Net Income, Basic EPS and Diluted EPS

(in thousands, except per share data)

(unaudited)












Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2012


2011


2012


2011

Net income, as reported

$

20,713

$

24,327

$

90,137

$

94,072

Adjustments to reconcile net income to non-GAAP net income:









Acquisition-related deferred revenue and GSA accrual,

net of tax effect


-


1,243


525


11,595

Stock-based compensation, net of tax effect


5,097


4,528


20,217


16,392

Amortization of acquisition intangibles, net of tax effect


2,088


2,113


8,010


6,354

Acquisition-related adjustment


6,783


-


6,783


-

Acquisition-related transaction costs, net of tax effect


536


263


987


1,796

Non-GAAP net income

$

35,217

$

32,474

$

126,659

$

130,209










Basic EPS, as reported

$

0.17

$

0.20

$

0.74

$

0.79

Adjustment to reconcile basic EPS to non-GAAP basic EPS:









Impact of acquisition-related deferred revenue and GSA accrual,

net of tax effect


-


0.01


0.00


0.10

Impact of stock-based compensation, net of tax effect


0.04


0.04


0.16


0.14

Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02


0.07


0.05

Impact of acquisition-related adjustment


0.06


-


0.06


-

Impact of acquisition-related transaction costs, net of tax effect


-


-


0.01


0.01

Non-GAAP basic EPS

$

0.29

$

0.27

$

1.04

$

1.09



















Diluted EPS, as reported

$

0.17

$

0.20

$

0.73

$

0.78

Adjustment to reconcile diluted EPS to non-GAAP diluted EPS:









Impact of acquisition-related deferred revenue, net of tax effect


-


0.01


0.00


0.10

Impact of stock-based compensation, net of tax effect


0.04


0.04


0.16


0.13

Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02


0.07


0.05

Impact of acquisition-related adjustment


0.06


-


0.06


-

Impact of acquisition-related transaction costs, net of tax effect


-


-


0.01


0.01

Non-GAAP diluted EPS

$

0.29

$

0.27

$

1.03

$

1.07










Weighted average shares outstanding -









Basic


122,754


120,582


121,973


119,836

Diluted


123,375


121,453


122,977


121,220




















Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS

(in thousands, except per share data)

(unaudited)












Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2012


2011


2012


2011

Net income, as reported

$

20,713

$

24,327

$

90,137

$

94,072

Adjustments to reconcile net income to EBITDA:









   Interest income


(221)


(280)


(716)


(1,319)

   Taxes


7,278


7,195


24,700


17,062

   Depreciation and amortization


17,657


14,152


58,686


49,897

EBITDA

$

45,427

$

45,394

$

172,807

$

159,712










Diluted EPS, as reported

$

0.17

$

0.20

$

0.73

$

0.78

Adjustment to reconcile diluted EPS to EBITDA:









   Interest income


-


(0.01)


(0.00)


(0.01)

   Taxes


0.06


0.06


0.20


0.14

   Depreciation and amortization


0.14


0.12


0.48


0.41

EBITDA diluted EPS

$

0.37

$

0.37

$

1.41

$

1.32










Weighted average shares outstanding - diluted


123,375


121,453


122,977


121,220






National Instruments

Reconciliation of GAAP to Non-GAAP EPS Guidance

(unaudited)










Three months ended




March 31, 2013




Low


High

GAAP fully diluted EPS, guidance

$

0.12

$

0.22

Adjustment to reconcile diluted EPS to non-GAAP diluted EPS:





 Impact of stock-based compensation, net of tax effect


0.05


0.05

 Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02







Non-GAAP diluted EPS, guidance

$

0.19

$

0.29

 

SOURCE National Instruments

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