National Instruments Reports Record Annual Revenue of $1.02 Billion
Q4 2011 Highlights
- Record GAAP revenue of
$278 million , up 11 percent year-over-year - Record non-GAAP revenue of
$280 million , up 12 percent year-over-year - GAAP gross margin of 76 percent and non-GAAP gross margin of 77 percent
- Fully diluted GAAP EPS of
$0.20 - Fully diluted non-GAAP EPS of
$0.27 - EBITDA of
$45 million , or$0.37 per share $366 million in cash and short-term investments as ofDec. 31, 2011 - 40 percent increase in quarterly dividend to
$0.14 per share
GAAP net income was
The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue and acquisition-related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.
"Despite recent economic headwinds, we executed well this quarter as we set a new quarterly revenue record and surpassed the
NI graphical system design products, which represented about 95 percent of the company's product portfolio, had approximately 14 percent year-over-year revenue growth in Q4 2011. Sales of NI instrument control products, which represented approximately 5 percent of NI revenue in the quarter, were down approximately 16 percent year-over-year in Q4 2011.
Geographically, revenue in U.S. dollar terms for Q4 2011 compared to Q4 2010 was up 9 percent in the
As of
FY 2011 Highlights
- Record GAAP revenue of
$1.02 billion , up 17 percent year-over-year - Record non-GAAP revenue of
$1.04 billion , up 19 percent year-over-year - GAAP gross margin of 76.5 percent
- Non-GAAP gross margin of 77.7 percent, a new post-IPO record
- GAAP operating margin of 11 percent
- Non-GAAP operating margin of 16 percent
- Fully diluted GAAP EPS of
$0.78 - Fully diluted non-GAAP EPS of
$1.07 - Record annual revenue for NI LabVIEW, PXI, and CompactRIO products
- NI named to FORTUNE magazine's 100 Best Companies to Work For list for 13th consecutive year and its inaugural 25 Best Multinational Companies to Work For list
Full-year 2011 GAAP revenue was
"While our strategic investments throughout 2011 have placed some pressure on short-term margins, we feel confident that they have positioned us for long-term growth," said
Guidance for Q1 2012
NI expects Q1 year-over-year revenue growth, with non-GAAP revenue expected to be between
In Q1 2012, the company anticipates that the GAAP to non-GAAP EPS adjustment will be approximately
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
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
Conference Call Information
Interested parties can listen to the Q4 2011 conference call today,
Forward-Looking Statements
This release contains "forward-looking statements," including statements related to validating the industry shift toward a software-based approach to instrumentation, being optimistic that NI's long-term software investment and the performance, size and productivity advantages of its hardware will allow NI to continue to transform the industry and provide quality solutions to its customers, increasing the dividend being a very effective method of returning cash to shareholders, pressure on short-term margins, leveraging the investments the company made in 2011 to drive sustained revenue growth and drive toward 18 percent non-GAAP operating income and NI's Q1 guidance for revenue, GAAP and non-GAAP EPS, non-GAAP effective tax rate and the amount of NI's GAAP to non-GAAP EPS adjustment. 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, the outcome of the company's dispute with the U.S. government on its GSA contract 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
About
Since 1976,
CompactRIO, LabVIEW,
Contact: | ||
Investor Relations | ||
(512) 683-8456 | ||
Consolidated Balance Sheets | |||
(in thousands) | |||
December 31, | |||
2011 | 2010 | ||
(unaudited) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | |||
Short-term investments | 223,504 | 131,215 | |
Accounts receivable, net | 157,056 | 127,214 | |
Inventories, net | 131,995 | 117,765 | |
Prepaid expenses and other current assets | 38,082 | 36,239 | |
Deferred income taxes, net | 26,304 | 18,838 | |
Total current assets | 719,549 | 650,718 | |
Property and equipment, net | 190,148 | 160,410 | |
Goodwill | 130,747 | 70,278 | |
Intangible assets, net | 83,866 | 52,816 | |
Other long-term assets | 29,984 | 25,460 | |
Total assets | |||
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | |||
Accrued compensation | 29,616 | 27,734 | |
Deferred revenue | 90,074 | 71,650 | |
Accrued expenses and other liabilities | 37,612 | 16,538 | |
Other taxes payable | 24,507 | 16,846 | |
Total current liabilities | 222,920 | 166,312 | |
Deferred income taxes | 43,186 | 29,477 | |
Liability for uncertain tax positions | 19,494 | 14,953 | |
Other long-term liabilities | 16,683 | 4,395 | |
Total liabilities | |||
Stockholders' equity: | |||
Preferred stock | - | - | |
Common stock | 1,207 | 1,179 | |
Additional paid-in capital | 471,830 | 407,713 | |
Retained earnings | 382,474 | 336,363 | |
Accumulated other comprehensive (loss) | (3,500) | (710) | |
Total stockholders' equity | |||
Total liabilities and stockholders' equity | |||
| |||||||||
Consolidated Statements of Income | |||||||||
(in thousands, except per share data) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
(Unaudited) | (Unaudited) | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net sales: | |||||||||
Product | $ | 256,606 | $ | 231,715 | $ | 955,613 | $ | 807,386 | |
Software maintenance | 21,445 | 18,248 | 81,667 | 65,834 | |||||
GSA accrual | - | - | (13,107) | - | |||||
Total net sales | 278,051 | 249,963 | 1,024,173 | 873,220 | |||||
Cost of sales: | |||||||||
Product | $ | 66,499 | $ | 55,278 | $ | 235,839 | $ | 195,096 | |
Software maintenance | 888 | 1,021 | 5,125 | 4,987 | |||||
Total cost of sales | 67,387 | 56,299 | 240,964 | 200,083 | |||||
Gross profit | $ | 210,664 | $ | 193,664 | $ | 783,209 | $ | 673,137 | |
Operating expenses: | |||||||||
Sales and marketing | $ | 102,221 | $ | 86,440 | $ | 388,768 | $ | 319,606 | |
Research and development | 54,502 | 43,237 | 199,071 | 158,149 | |||||
General and administrative | 21,439 | 17,368 | 82,658 | 67,069 | |||||
Total operating expenses | $ | 178,162 | $ | 147,045 | $ | 670,497 | $ | 544,824 | |
Operating income | $ | 32,502 | $ | 46,619 | $ | 112,712 | $ | 128,313 | |
Other income (expense): | |||||||||
Interest income | $ | 280 | $ | 340 | $ | 1,319 | $ | 1,391 | |
Net foreign exchange gain (loss) | (1,338) | (110) | (2,755) | (2,585) | |||||
Other income (expense), net | 78 | 23 | (142) | 993 | |||||
Income before income taxes | $ | 31,522 | $ | 46,872 | $ | 111,134 | $ | 128,112 | |
Provision for income taxes | 7,195 | 8,844 | 17,062 | 18,996 | |||||
Net income | $ | 24,327 | $ | 38,028 | $ | 94,072 | $ | 109,116 | |
Basic earnings per share | $ | 0.20 | $ | 0.32 | $ | 0.79 | $ | 0.93 | |
Diluted earnings per share | $ | 0.20 | $ | 0.32 | $ | 0.78 | $ | 0.92 | |
Weighted average shares outstanding - | |||||||||
Basic | 120,582 | 117,639 | 119,836 | 116,973 | |||||
Diluted | 121,453 | 119,002 | 121,220 | 118,572 | |||||
Dividends declared per share | $ | 0.10 | $ | 0.09 | $ | 0.40 | $ | 0.35 | |
Consolidated Statements of Cash Flows | |||||
(in thousands) | |||||
Twelve Months Ended | |||||
(Unaudited) | |||||
2011 | 2010 | ||||
Cash flow from operating activities: | |||||
Net income | $ | 94,072 | $ | 109,116 | |
Adjustments to reconcile net income to net cash provided | |||||
by operating activities: | |||||
Depreciation and amortization | 49,897 | 37,872 | |||
Stock-based compensation | 23,219 | 18,795 | |||
Tax (benefit) expense from deferred income taxes | (8,581) | 3,668 | |||
Tax (benefit) expense from stock option plans | (5,151) | (96) | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (21,957) | (22,923) | |||
Inventories | (11,817) | (30,930) | |||
Prepaid expenses and other assets | (1,350) | (20,411) | |||
Accounts payable | 5,573 | 9,630 | |||
Deferred revenue | 16,953 | 14,408 | |||
Taxes and other liabilities | 29,041 | 25,929 | |||
Net cash provided by operating activities | $ | 169,899 | $ | 145,058 | |
Cash flow from investing activities: | |||||
Capital expenditures | (54,830) | (28,397) | |||
Capitalization of internally developed software | (12,065) | (15,759) | |||
Additions to other intangibles | (5,035) | (4,151) | |||
Acquisitions, net of cash received | (73,558) | (4,218) | |||
Purchases of short-term investments | (257,449) | (126,691) | |||
Sales and maturities of short-term investments | 166,104 | 82,672 | |||
Net cash (used by) investing activities | $ | (236,833) | $ | (96,544) | |
Cash flow from financing activities: | |||||
Proceeds from issuance of common stock | 32,905 | 51,852 | |||
Repurchase of common stock | - | (41,862) | |||
Dividends paid | (47,961) | (40,618) | |||
Tax benefit (expense) from stock option plans | 5,151 | 96 | |||
Net cash (used by) financing activities | $ | (9,905) | $ | (30,532) | |
Net change in cash and cash equivalents | (76,839) | 17,982 | |||
Cash and cash equivalents at beginning of period | 219,447 | 201,465 | |||
Cash and cash equivalents at end of period | $ | 142,608 | $ | 219,447 | |
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 | Twelve Months Ended | ||||||||
December 31, | |||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Revenue | |||||||||
Acquisition related deferred revenue | $ | 1,912 | $ | - | $ | 4,730 | $ | - | |
GSA accrual | - | - | 13,107 | - | |||||
Provision for income taxes | (669) | - | (6,242) | - | |||||
Total | $ | 1,243 | $ | - | $ | 11,595 | $ | - | |
2011 | 2010 | 2011 | 2010 | ||||||
Stock-Based Compensation | |||||||||
Cost of sales | $ | 411 | $ | 331 | $ | 1,527 | $ | 1,345 | |
Sales and marketing | 2,702 | 1,851 | 9,711 | 7,911 | |||||
Research and development | 2,625 | 1,774 | 8,870 | 6,903 | |||||
General and administrative | 831 | 645 | 3,111 | 2,636 | |||||
Provision for income taxes | (2,041) | (1,549) | (6,827) | (5,971) | |||||
Total | $ | 4,528 | $ | 3,052 | $ | 16,392 | $ | 12,824 | |
Amortization of Acquisition Intangibles | |||||||||
Cost of sales | $ | 2,469 | $ | 921 | $ | 7,064 | $ | 3,486 | |
Sales and marketing | 447 | 75 | 1,071 | 386 | |||||
General and administrative | - | 15 | - | 15 | |||||
Other income, net | 190 | - | 955 | - | |||||
Provision for income taxes | (993) | (298) | (2,736) | (1,202) | |||||
Total | $ | 2,113 | $ | 713 | $ | 6,354 | $ | 2,685 | |
Acquisition-Related Transaction Costs | |||||||||
Cost of sales | $ | 32 | $ | - | $ | 54 | $ | - | |
Sales and marketing | 220 | - | 1,349 | - | |||||
Research and development | 106 | - | 176 | - | |||||
General and administrative | 47 | - | 505 | - | |||||
Provision for income taxes | (142) | - | (288) | - | |||||
Total | $ | 263 | $ | - | $ | 1,796 | $ | - | |
Reconciliation of GAAP to Non-GAAP Measures | |||||||||
(in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December 31, | |||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Reconciliation of Revenue to Non-GAAP Revenue | |||||||||
Revenue, as reported | $ | 278,051 | $ | 249,963 | $ | 1,024,173 | $ | 873,220 | |
Acquisition related deferred revenue | 1,912 | - | 4,730 | - | |||||
GSA accrual | - | - | 13,107 | - | |||||
Non-GAAP revenue | $ | 279,963 | $ | 249,963 | $ | 1,042,010 | $ | 873,220 | |
Reconciliation of Gross Profit to Non-GAAP Gross Profit | |||||||||
Gross profit, as reported | $ | 210,664 | $ | 193,664 | $ | 783,209 | $ | 673,137 | |
Acquisition-related deferred revenue and GSA accrual | 1,912 | - | 17,837 | - | |||||
Stock-based compensation | 411 | 331 | 1,527 | 1,345 | |||||
Amortization of acquisition intangibles | 2,469 | 921 | 7,064 | 3,486 | |||||
Acquisition-related transaction costs | 32 | - | 54 | - | |||||
Non-GAAP gross profit | $ | 215,488 | $ | 194,916 | $ | 809,691 | $ | 677,968 | |
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | |||||||||
Operating expenses, as reported | $ | 178,162 | $ | 147,045 | $ | 670,497 | $ | 544,824 | |
Stock-based compensation | (6,158) | (4,270) | (21,692) | (17,450) | |||||
Amortization of acquisition intangibles | (447) | (90) | (1,071) | (401) | |||||
Acquisition-related transaction costs | (373) | - | (2,030) | - | |||||
Non-GAAP operating expenses | $ | 171,184 | $ | 142,685 | $ | 645,704 | $ | 526,973 | |
Reconciliation of Operating Income to Non-GAAP Operating Income | |||||||||
Operating income, as reported | $ | 32,502 | $ | 46,619 | $ | 112,712 | $ | 128,313 | |
Acquisition-related deferred revenue and GSA accrual | 1,912 | - | 17,837 | - | |||||
Stock-based compensation | 6,569 | 4,601 | 23,219 | 18,795 | |||||
Amortization of acquisition intangibles | 2,916 | 1,011 | 8,135 | 3,887 | |||||
Acquisition-related transaction costs | 405 | - | 2,084 | - | |||||
Non-GAAP operating income | $ | 44,304 | $ | 52,231 | $ | 163,987 | $ | 150,995 | |
Reconciliation of Income Before Income Taxes to Non-GAAP Income Before Income Taxes | |||||||||
Income before income taxes, as reported | $ | 31,522 | $ | 46,872 | $ | 111,134 | $ | 128,112 | |
Acquisition-related deferred revenue and GSA accrual | 1,912 | - | 17,837 | - | |||||
Stock-based compensation | 6,569 | 4,601 | 23,219 | 18,795 | |||||
Amortization of acquisition intangibles | 3,106 | 1,011 | 9,090 | 3,887 | |||||
Acquisition-related transaction costs | 405 | - | 2,084 | - | |||||
Non-GAAP income before income taxes | $ | 43,514 | $ | 52,484 | $ | 163,364 | $ | 150,794 | |
Reconciliation of Provision for Income Taxes to Non-GAAP Provision for Income Taxes | |||||||||
Provision for income taxes, as reported | $ | 7,195 | $ | 8,844 | $ | 17,062 | $ | 18,996 | |
Acquisition-related deferred revenue and GSA accrual | 669 | - | 6,242 | - | |||||
Stock-based compensation | 2,041 | 1,549 | 6,827 | 5,971 | |||||
Amortization of acquisition intangibles | 993 | 298 | 2,736 | 1,202 | |||||
Acquisition-related transaction costs | 142 | - | 288 | - | |||||
Non-GAAP provision for income taxes | $ | 11,040 | $ | 10,691 | $ | 33,155 | $ | 26,169 | |
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 | Twelve Months Ended | |||||||||
December 31, | ||||||||||
2011 | 2010 | 2011 | 2010 | |||||||
Net income, as reported | $ | 24,327 | $ | 38,028 | $ | 94,072 | $ | 109,116 | ||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||
Acquisition-related deferred revenue and GSA accrual, net of tax effect | 1,243 | - | 11,595 | - | ||||||
Stock-based compensation, net of tax effect | 4,528 | 3,052 | 16,392 | 12,824 | ||||||
Amortization of acquisition intangibles, net of tax effect | 2,113 | 713 | 6,354 | 2,685 | ||||||
Acquisition-related transaction costs, net of tax effect | 263 | - | 1,796 | - | ||||||
Non-GAAP net income | $ | 32,474 | $ | 41,793 | $ | 130,209 | $ | 124,625 | ||
Basic EPS, as reported | $ | 0.20 | $ | 0.32 | $ | 0.79 | $ | 0.93 | ||
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 | - | 0.10 | - | ||||||
Impact of stock-based compensation, net of tax effect | 0.04 | 0.03 | 0.14 | 0.11 | ||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.02 | 0.01 | 0.05 | 0.03 | ||||||
Impact of acquisition-related transaction costs, net of tax effect | 0.00 | - | 0.01 | - | ||||||
Non-GAAP basic EPS | $ | 0.27 | $ | 0.36 | $ | 1.09 | $ | 1.07 | ||
Diluted EPS, as reported | $ | 0.20 | $ | 0.32 | $ | 0.78 | $ | 0.92 | ||
Adjustment to reconcile diluted EPS to non-GAAP | ||||||||||
diluted EPS: | ||||||||||
Impact of acquisition-related deferred revenue and GSA accrual, net of tax effect | 0.01 | - | 0.10 | - | ||||||
Impact of stock-based compensation, net of tax effect | 0.04 | 0.02 | 0.13 | 0.11 | ||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.02 | 0.01 | 0.05 | 0.02 | ||||||
Impact of acquisition-related transaction costs, net of tax effect | 0.00 | - | 0.01 | - | ||||||
Non-GAAP diluted EPS | $ | 0.27 | $ | 0.35 | $ | 1.07 | $ | 1.05 | ||
Weighted average shares outstanding - | ||||||||||
Basic | 120,582 | 117,639 | 119,836 | 116,973 | ||||||
Diluted | 121,453 | 119,002 | 121,220 | 118,572 | ||||||
Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS (in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December 31, | |||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net income, as reported | $ | 24,327 | $ | 38,028 | $ | 94,072 | $ | 109,116 | |
Adjustments to reconcile net income to EBITDA: | |||||||||
Interest income | (280) | (340) | (1,319) | (1,391) | |||||
Taxes | 7,195 | 8,844 | 17,062 | 18,996 | |||||
Depreciation and amortization | 14,152 | 9,652 | 49,897 | 37,872 | |||||
EBITDA | $ | 45,394 | $ | 56,184 | $ | 159,712 | $ | 164,593 | |
Diluted EPS, as reported | $ | 0.20 | $ | 0.32 | $ | 0.78 | $ | 0.92 | |
Adjustment to reconcile diluted EPS to EBITDA | |||||||||
Interest income | (0.01) | (0.00) | (0.01) | (0.01) | |||||
Taxes | 0.06 | 0.07 | 0.14 | 0.16 | |||||
Depreciation and amortization | 0.12 | 0.08 | 0.41 | 0.32 | |||||
EBITDA diluted EPS | $ | 0.37 | $ | 0.47 | $ | 1.32 | $ | 1.39 | |
Weighted average shares outstanding - Diluted | 121,453 | 119,002 | 121,220 | 118,572 | |||||
Reconciliation of GAAP to Non-GAAP Guidance | ||||||
(unaudited) | ||||||
Three months ended | ||||||
(Millions) | ||||||
Low | High | |||||
GAAP revenue, guidance | $ | 249 | $ | 269 | ||
Adjustment to reconcile revenue to non-GAAP revenue: | ||||||
Impact of acquisition-related deferred revenue write-off | ||||||
1 | 1 | |||||
Non-GAAP revenue, guidance | $ | 250 | $ | 270 | ||
Reconciliation of GAAP to Non-GAAP EPS Guidance | ||||||
(unaudited) | ||||||
Three months ended | ||||||
Low | High | |||||
GAAP fully diluted EPS, guidance | $ | 0.09 | $ | 0.17 | ||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS: | ||||||
Impact of acquisition-related deferred revenue write-off | 0.01 | 0.01 | ||||
Impact of stock-based compensation, net of tax effect | 0.04 | 0.04 | ||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.02 | 0.02 | ||||
Non-GAAP diluted EPS, guidance | $ | 0.16 | $ | 0.24 | ||
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