AUSTIN, Texas, April 25, 2013 /PRNewswire/ -- National Instruments (Nasdaq: NATI) today announced Q1 revenue of $286 million, a new first quarter record and a 10 percent increase from Q1 2012. Orders were up 8 percent year-over-year in Q1, with the average order size reaching a new first quarter record of $4,975. In Q1, the company's orders under $20,000 declined 1 percent year-over-year; orders between $20,000 and $100,000 grew 6 percent year-over-year; and orders above $100,000 grew 43 percent year-over-year.

GAAP net income for Q1 was $19 million, with fully diluted earnings per share (EPS) of $0.15, and non-GAAP net income was $26 million, with non-GAAP fully diluted EPS of $0.21. The company's EPS was $0.03 below the midpoint of its guidance range due to a $0.01 per share loss on foreign exchange, primarily from the devaluation of the Japanese yen, and $0.02 per share as a result of expenses running ahead of plan. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $35 million, or $0.28 per share for Q1.

In Q1, GAAP gross margin increased to 75.5 percent and non-GAAP gross margin reached 76.6 percent, up sequentially from 75.2 and 76.0 percent, respectively.

The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments and acquisition-related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.

National Instruments continued to deliver value to its largest customer and secured orders from this customer related to three different applications that use LabVIEW and the NI PXI platform to rapidly develop a production test solution. In Q1 2013, National Instruments received approximately $17 million in orders from this customer and an additional $7 million in orders to date in Q2. The majority of these orders are related to a new application in a highly competitive space that NI has not served for this customer before.  As a result, gross margins for this application are significantly below company average. National Instruments recognized $4 million in revenue from this customer in Q1 and anticipates recognizing the remainder of the revenue from existing orders over the coming quarters. Due to a reduced forecast for this customer, National Instruments now believes the total value of orders from its largest customer may be less than the total value of orders received from this customer in 2012.

"We are disappointed we overspent in the first quarter, and are taking corrective actions to adjust our spending," said Dr. James Truchard, co-founder, president and CEO. "We are focusing our efforts on activities that have proven successful in growing our large order business."

Geographic revenue in U.S. dollar terms for Q1 2013 compared to Q1 2012 was up 12 percent in the Americas, up 4 percent in Europe, up 3 percent in East Asia and up 37 percent in Emerging Markets. In East Asia, the significant decline in the value of the Japanese yen negatively impacted the region's performance. In local currency terms, revenue was up 4 percent in Europe, up 2 percent in East Asia and up 35 percent in Emerging Markets.

As of March 31, NI had $327 million in cash and short-term investments. The National Instruments Board of Directors approved a quarterly dividend of $0.14 per share on the company's common stock payable on June 3 to stockholders of record on May 13.

Guidance for Q2 2013
"While we were very pleased with our revenue execution in Q1, we are very disappointed in our profit performance," said Alex Davern, NI COO and CFO. "We are taking corrective actions to control our spending through the rest of 2013."

National Instruments continues to be conservative in planning for Q2 due to the continued weakness of the PMI and the reduced forecast for its largest customer. As a result, NI expects revenue for Q2 2013 to be between $290 million and $320 million, an increase of 5 percent at the midpoint of guidance over Q2 2012. NI expects gross margins to decline significantly year-over-year in Q2 2013, due to customer mix and lowered production levels, and total non-GAAP operating expenses to be $193 million, plus or minus $2 million. The company expects fully diluted EPS will be in the range of $0.09 to $0.21 for Q2, with non-GAAP fully diluted EPS expected to be in the range of $0.16 to $0.28.

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 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 March 31, 2013 and 2012, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP operating expenses and 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, 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 EBITDA and EBITDA diluted EPS for the three-month periods ending March 31, 2013 and 2012. The company also 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 Q1 2013 conference call today, April 25, at 4:00 p.m. CT at ni.com/call. Replay information is available by calling (855) 859-2056, confirmation code #27646139, shortly after the call through April 30 at 11:00 p.m. CT.

Forward-Looking Statements
This release contains "forward-looking statements," including statements related to taking corrective actions to adjust spending, recognizing the remainder of the revenue from existing orders from its largest customer over the coming quarters, belief the total value of orders from its largest customer may be less than the total value of orders received from this customer in 2012, focusing efforts on activities that have proven successful in growing its large order business, being conservative in planning, continued weakness in the Global PMI, the reduced forecast from its largest customer and the company's Q2 guidance for revenue, gross margins, non-GAAP operating expenses and GAAP and non-GAAP EPS. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, foreign exchange fluctuations, component shortages, delays in the release of new products, fluctuations in customer demand for NI products including orders from NI's largest customer, fluctuations in average order size, the company's ability to effectively manage its operating expenses, manufacturing inefficiencies, adjustments to acquisition earn-out accruals 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, 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, ni.com and NI CompactDAQ 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, caitlin.gursslin@ni.com

SOURCE National Instruments