National Instruments Reports Record Revenue
Q2 2011 Highlights
- Record quarterly revenue of
$253 million , up 20 percent year-over-year - Strong revenue growth in academic, PXI Modular Instrumentation, Software, Data Acquisition and NI CompactRIO products
- GAAP gross margin of 77.9 percent and non-GAAP gross margin of 78.5 percent
- Record GAAP and non-GAAP operating income for a second quarter
- Fully diluted GAAP EPS of
$ 0.22 - Fully diluted non-GAAP EPS of
$0.27 , at the mid-point of guidance - Record EBITDA of
$44 million , or$0.37 per share for a second quarter - Cash and short-term investments of
$320 million as ofJune 30, 2011
In Q2, GAAP and non-GAAP operating income reached all-time records for a second quarter. Net income for Q2 was
In Q2, GAAP gross margin increased 90 basis points year-over-year to 77.9 percent. Non-GAAP gross margin reached 78.5 percent, an increase of 90 basis points year-over-year.
The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles and acquisition related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.
"I am extremely pleased with our ability to deliver record quarterly revenue and record operating profit for a second quarter," said Dr.
NI graphical system design product sales were up 21 percent year-over-year, and NI instrument control product sales were up 6 percent year-over-year in Q2. Geographically, revenue in U.S. dollar terms for Q2 2011 compared to Q2 2010 was up 15 percent in the
As of
"We are encouraged by the scale of the long-term opportunity open to us, and plan to continue to execute on our 2011 investment plans," said
Guidance for Q3 2011
NI expects revenue for Q3 to be between
Given our aggressive 2011 investment plan and the recent acquisitions we expect to see a significant increase in non-GAAP operating expenses in Q3, to approximately
The company expects fully diluted EPS will 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 gross profit, operating expenses, operating income, income before income taxes, provision for income taxes, net income and basic and fully diluted EPS for the three- month periods ending
Conference Call Information
Interested parties can listen to the Q2 2011 conference call today,
Forward-Looking Statements
This release contains "forward-looking statements," including statements related to the strength of our business model, commitments to long-term investments, watching closely to see how global business responds, the scale of the opportunity open to us, our plan to execute on our investment plans, that our investments will advance our long-term position and our Q3 guidance for GAAP and non-GAAP revenue (including AWR revenue) 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, component shortages, delays in the release of new products, fluctuations in customer demand for NI products, the company's ability to continue to control its operating expenses, manufacturing inefficiencies, the outcome of events in
About
CompactRIO, LabVIEW,
National Instruments | |||||
Consolidated Balance Sheets | |||||
(in thousands) | |||||
June 30, | December 31, | ||||
2011 | 2010 | ||||
(unaudited) | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 207,367 | $ | 219,447 | |
Short-term investments | 112,341 | 131,215 | |||
Accounts receivable, net | 148,939 | 127,214 | |||
Inventories, net | 141,571 | 117,765 | |||
Prepaid expenses and other current assets | 42,007 | 36,239 | |||
Deferred income taxes, net | 13,919 | 18,838 | |||
Total current assets | 666,144 | 650,718 | |||
Property and equipment, net | 171,506 | 160,410 | |||
Goodwill | 132,011 | 70,278 | |||
Intangible assets, net | 93,971 | 52,816 | |||
Other long-term assets | 25,938 | 25,460 | |||
Total assets | $ | 1,089,570 | $ | 959,682 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 36,475 | $ | 33,544 | |
Accrued compensation | 34,135 | 27,734 | |||
Deferred revenue | 80,172 | 71,650 | |||
Accrued expenses and other liabilities | 20,156 | 16,538 | |||
Other taxes payable | 19,478 | 16,846 | |||
Total current liabilities | 190,416 | 166,312 | |||
Deferred income taxes | 37,476 | 29,477 | |||
Liability for uncertain tax position | 18,016 | 14,953 | |||
Other long-term liabilities | 17,201 | 4,395 | |||
Total liabilities | $ | 263,109 | $ | 215,137 | |
Stockholders' equity: | |||||
Preferred stock | - | - | |||
Common stock | 1,201 | 1,179 | |||
Additional paid-in capital | 447,407 | 407,713 | |||
Retained earnings | 369,512 | 336,363 | |||
Accumulated other comprehensive income (loss) | 8,341 | (710) | |||
Total stockholders' equity | $ | 826,461 | $ | 744,545 | |
Total liabilities and stockholders' equity | $ | 1,089,570 | $ | 959,682 | |
National Instruments | |||||||||
Consolidated Statements of Income | |||||||||
(in thousands, except per share data) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
(Unaudited) | (Unaudited) | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net sales: | |||||||||
Product | $ | 233,141 | $ | 194,830 | $ | 451,751 | $ | 370,225 | |
Software maintenance | 20,143 | 16,887 | 39,383 | 32,583 | |||||
Total net sales | 253,284 | 211,717 | 491,134 | 402,808 | |||||
Cost of sales: | |||||||||
Cost of product | $ | 54,803 | $ | 47,176 | $ | 105,761 | $ | 89,438 | |
Cost of software maintenance | 1,083 | 1,463 | 2,601 | 2,443 | |||||
Total cost of sales | 55,886 | 48,639 | 108,362 | 91,881 | |||||
Gross profit | $ | 197,398 | $ | 163,078 | $ | 382,772 | $ | 310,927 | |
Operating expenses: | |||||||||
Sales and marketing | $ | 96,197 | $ | 79,231 | $ | 183,352 | $ | 153,672 | |
Research and development | 47,027 | 36,395 | 89,895 | 74,941 | |||||
General and administrative | 21,232 | 16,969 | 40,071 | 32,309 | |||||
Total operating expenses | $ | 164,456 | $ | 132,595 | $ | 313,318 | $ | 260,922 | |
Operating income | $ | 32,942 | $ | 30,483 | $ | 69,454 | $ | 50,005 | |
Other income (expense): | |||||||||
Interest income | $ | 344 | $ | 371 | $ | 685 | $ | 671 | |
Net foreign exchange (loss) | (486) | (2,203) | (709) | (2,901) | |||||
Other income (loss), net | (571) | 462 | (125) | 810 | |||||
Income before income taxes | $ | 32,229 | $ | 29,113 | $ | 69,305 | $ | 48,585 | |
Provision for income taxes | 5,681 | 4,511 | 12,296 | 5,630 | |||||
Net income | $ | 26,548 | $ | 24,602 | $ | 57,009 | $ | 42,955 | |
Basic earnings per share | $ | 0.22 | $ | 0.21 | $ | 0.48 | $ | 0.37 | |
Diluted earnings per share | $ | 0.22 | $ | 0.21 | $ | 0.47 | $ | 0.36 | |
Weighted average shares outstanding - | |||||||||
basic | 119,736 | 116,898 | 119,218 | 116,485 | |||||
diluted | 121,161 | 118,488 | 120,810 | 118,128 | |||||
Dividends declared per share | $ | 0.10 | $ | 0.09 | $ | 0.20 | $ | 0.18 | |
National Instruments | |||||
Consolidated Statements of Cash Flows | |||||
(in thousands) | |||||
Six Months Ended | |||||
June 30, | |||||
(Unaudited) | |||||
2011 | 2010 | ||||
Cash flow from operating activities: | |||||
Net income | $ | 57,009 | $ | 42,955 | |
Adjustments to reconcile net income to net cash provided | |||||
by operating activities: | |||||
Depreciation and amortization | 23,390 | 18,988 | |||
Stock-based compensation | 10,296 | 9,459 | |||
Tax expense from deferred income taxes | 2,770 | 3,774 | |||
Tax (benefit) expense from stock option plans | (5,035) | 579 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (13,841) | (6,803) | |||
Inventories | (21,393) | (9,163) | |||
Prepaid expenses and other assets | 2,186 | (18,740) | |||
Accounts payable | 937 | 4,953 | |||
Deferred revenue | 7,051 | 7,205 | |||
Taxes and other liabilities | 9,926 | 18,513 | |||
Net cash provided by operating activities | $ | 73,296 | $ | 71,720 | |
Cash flow from investing activities: | |||||
Capital expenditures | (23,053) | (10,015) | |||
Capitalization of internally developed software | (9,391) | (11,021) | |||
Additions to other intangibles | (1,756) | (1,690) | |||
Acquisition, net of cash received | (73,558) | (2,191) | |||
Purchases of short-term investments | (54,097) | (85,199) | |||
Sales and maturities of short-term investments | 73,915 | 41,538 | |||
Net cash (used by) investing activities | $ | (87,940) | $ | (68,578) | |
Cash flow from financing activities: | |||||
Proceeds from issuance of common stock | 21,389 | 32,550 | |||
Repurchase of common stock | - | (30,935) | |||
Dividends paid | (23,860) | (20,225) | |||
Tax benefit (expense) from stock option plans | 5,035 | (579) | |||
Net cash provided by (used by) financing activities | $ | 2,564 | $ | (19,189) | |
Net change in cash and cash equivalents | (12,080) | (16,047) | |||
Cash and cash equivalents at beginning of period | 219,447 | 201,465 | |||
Cash and cash equivalents at end of period | $ | 207,367 | $ | 185,418 | |
Detail of GAAP charges related to stock-based compensation, | |||||||||
amortization of acquisition intangibles, and acquisition related transaction costs | |||||||||
(Unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Stock-based compensation | |||||||||
Cost of sales | $ | 398 | $ | 320 | $ | 715 | $ | 682 | |
Sales and marketing | 2,457 | 1,996 | 4,379 | 4,100 | |||||
Research and development | 2,070 | 1,593 | 3,756 | 3,358 | |||||
General and administrative | 781 | 634 | 1,446 | 1,319 | |||||
Provision for income taxes | (2,120) | (1,582) | (3,960) | (3,127) | |||||
Total | $ | 3,586 | $ | 2,961 | $ | 6,336 | $ | 6,332 | |
Amortization of acquisition intangibles | |||||||||
Cost of sales | $ | 1,005 | $ | 922 | $ | 2,009 | $ | 1,644 | |
Sales and marketing | 100 | 100 | 177 | 222 | |||||
Provision for income taxes | (359) | (327) | (709) | (580) | |||||
Total | $ | 746 | $ | 695 | $ | 1,477 | $ | 1,286 | |
Acquisition related transaction costs | |||||||||
Sales and marketing | $ | 982 | $ | - | $ | 982 | $ | - | |
General and administrative | 427 | - | 427 | - | |||||
Provision for income taxes | (51) | - | (51) | - | |||||
Total | $ | 1,358 | $ | - | $ | 1,358 | $ | - | |
National Instruments | |||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||
(in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit | |||||||||
Gross profit, as reported | $ | 197,398 | $ | 163,078 | $ | 382,772 | $ | 310,927 | |
Stock-based compensation | 398 | 320 | 715 | 682 | |||||
Amortization of acquisition intangibles | 1,005 | 922 | 2,009 | 1,644 | |||||
Non-GAAP gross profit | $ | 198,801 | $ | 164,320 | $ | 385,496 | $ | 313,253 | |
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | |||||||||
Operating expenses, as reported | $ | 164,456 | $ | 132,595 | $ | 313,318 | $ | 260,922 | |
Stock-based compensation | (5,308) | (4,223) | (9,581) | (8,777) | |||||
Amortization of acquisition intangibles | (100) | (100) | (177) | (222) | |||||
Acquisition related transaction costs | (1,409) | - | (1,409) | - | |||||
Non-GAAP operating expenses | $ | 157,639 | $ | 128,272 | $ | 302,151 | $ | 251,923 | |
Reconciliation of Operating Income to Non-GAAP Operating Income | |||||||||
Operating income, as reported | $ | 32,942 | $ | 30,483 | $ | 69,454 | $ | 50,005 | |
Stock-based compensation | 5,706 | 4,543 | 10,296 | 9,459 | |||||
Amortization of acquisition intangibles | 1,105 | 1,022 | 2,186 | 1,866 | |||||
Acquisition related transaction costs | 1,409 | - | 1,409 | - | |||||
Non-GAAP operating income | $ | 41,162 | $ | 36,048 | $ | 83,345 | $ | 61,330 | |
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes | |||||||||
Income before income taxes, as reported | $ | 32,229 | $ | 29,113 | $ | 69,305 | $ | 48,585 | |
Stock-based compensation | 5,706 | 4,543 | 10,296 | 9,459 | |||||
Amortization of acquisition intangibles | 1,105 | 1,022 | 2,186 | 1,866 | |||||
Acquisition related transaction costs | 1,409 | - | 1,409 | - | |||||
Non-GAAP income before income taxes | $ | 40,449 | $ | 34,678 | $ | 83,196 | $ | 59,910 | |
Reconciliation of Provision for Income Taxes to Non-GAAP Provision For Income Taxes | |||||||||
Provision for income taxes, as reported | $ | 5,681 | $ | 4,511 | $ | 12,296 | $ | 5,630 | |
Stock-based compensation | 2,120 | 1,582 | 3,960 | 3,127 | |||||
Amortization of acquisition intangibles | 359 | 327 | 709 | 580 | |||||
Acquisition related transaction costs | 51 | - | 51 | - | |||||
Non-GAAP provision for income taxes | $ | 8,211 | $ | 6,420 | $ | 17,016 | $ | 9,337 | |
Reconciliation of GAAP Net Income, Basic EPS and Diluted EPS to Non-GAAP Net Income, Basic EPS and Diluted EPS | |||||||||
(unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net income, as reported | $ | 26,548 | $ | 24,602 | $ | 57,009 | $ | 42,955 | |
Adjustments to reconcile net income to non-GAAP net income: | |||||||||
Stock-based compensation, net of tax effect | 3,586 | 2,961 | 6,336 | 6,332 | |||||
Amortization of acquisition intangibles, net of tax effect | 746 | 695 | 1,477 | 1,286 | |||||
Acquisition related transaction costs | 1,358 | - | 1,358 | - | |||||
Non-GAAP net income | $ | 32,238 | $ | 28,258 | $ | 66,180 | $ | 50,573 | |
Basic EPS, as reported | $ | 0.22 | $ | 0.21 | $ | 0.48 | $ | 0.37 | |
Adjustment to reconcile basic EPS to non-GAAP | |||||||||
basic EPS: | |||||||||
Impact of stock-based compensation, net of tax effect | $ | 0.03 | $ | 0.02 | $ | 0.06 | $ | 0.05 | |
Impact of amortization of acquisition intangibles, net of tax effect | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |
Impact of acquisition related transaction costs | $ | 0.01 | $ | - | $ | 0.01 | $ | - | |
Non-GAAP basic EPS | $ | 0.27 | $ | 0.24 | $ | 0.56 | $ | 0.43 | |
Diluted EPS, as reported | $ | 0.22 | $ | 0.21 | $ | 0.47 | $ | 0.36 | |
Adjustment to reconcile diluted EPS to non-GAAP | |||||||||
diluted EPS: | |||||||||
Impact of stock-based compensation, net of tax effect | $ | 0.03 | $ | 0.02 | $ | 0.06 | $ | 0.06 | |
Impact of amortization of acquisition intangibles, net of tax effect | $ | 0.01 | 0.01 | $ | 0.01 | $ | 0.01 | ||
Impact of acquisition related transaction costs | $ | 0.01 | $ | - | $ | 0.01 | $ | - | |
Non-GAAP diluted EPS | $ | 0.27 | $ | 0.24 | $ | 0.55 | $ | 0.43 | |
Weighted average shares outstanding - | |||||||||
Basic | 119,736 | 116,898 | 119,218 | 116,485 | |||||
Diluted | 121,161 | 118,488 | 120,810 | 118,128 | |||||
Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS | |||||||||
(unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
Net income, as reported | $ | 26,548 | $ | 24,602 | $ | 57,009 | $ | 42,955 | |
Adjustments to reconcile net income to EBITDA: | |||||||||
Interest income | (344) | (371) | (685) | (671) | |||||
Taxes | 5,681 | 4,511 | 12,296 | 5,630 | |||||
Depreciation and amortization | 12,417 | 9,546 | 23,390 | 18,988 | |||||
EBITDA | $ | 44,302 | $ | 38,288 | $ | 92,010 | $ | 66,902 | |
Diluted EPS, as reported | $ | 0.22 | $ | 0.21 | $ | 0.47 | $ | 0.36 | |
Adjustment to reconcile diluted EPS to EBITDA | |||||||||
Interest income | $ | (0.00) | $ | (0.00) | $ | (0.01) | $ | (0.01) | |
Taxes | $ | 0.05 | $ | 0.03 | $ | 0.10 | $ | 0.05 | |
Depreciation and amortization | $ | 0.10 | $ | 0.08 | $ | 0.20 | $ | 0.17 | |
EBITDA diluted EPS | $ | 0.37 | $ | 0.32 | $ | 0.76 | $ | 0.57 | |
Weighted average shares outstanding - Diluted | 121,161 | 118,488 | 120,810 | 118,128 | |||||
National Instruments | ||||||
Reconciliation of GAAP to Non-GAAP Operating Expense Guidance | ||||||
(unaudited) | ||||||
Three months ended | ||||||
September 30, 2011 | ||||||
(Thousands) | ||||||
Low | High | |||||
GAAP operating expense, guidance | $ | 174,650 | $ | 178,650 | ||
Adjustment to reconcile operating expense to non-GAAP | ||||||
operating expense: | ||||||
Impact of stock-based compensation | $ | (5,800) | $ | (5,800) | ||
Impact of amortization of acquisition intangibles | $ | (850) | $ | (850) | ||
Non-GAAP operating expense, guidance | $ | 168,000 | $ | 172,000 | ||
National Instruments | ||||||
Reconciliation of GAAP to Non-GAAP Revenue Guidance | ||||||
(unaudited) | ||||||
Three months ended | ||||||
September 30, 2011 | ||||||
(Millions) | ||||||
Low | High | |||||
GAAP revenue, guidance | $ | 257 | $ | 273 | ||
Adjustment to reconcile revenue to non-GAAP | ||||||
revenue: | ||||||
Impact of acquisition deferred revenue write down | $ | 3 | $ | 3 | ||
Non-GAAP revenue, guidance | $ | 260 | $ | 276 | ||
National Instruments | ||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance | ||||||
(unaudited) | ||||||
Three months ended | ||||||
September 30, 2011 | ||||||
Low | High | |||||
GAAP Fully Diluted EPS, guidance | $ | 0.16 | $ | 0.24 | ||
Adjustment to reconcile diluted EPS to non-GAAP | ||||||
diluted EPS: | ||||||
Impact of acquisition deferred revenue write down, net of tax effect | $ | 0.02 | $ | 0.02 | ||
Impact of stock-based compensation, net of tax effect | $ | 0.03 | $ | 0.03 | ||
Impact of amortization of acquisition intangibles, net of tax effect | $ | 0.02 | $ | 0.02 | ||
Non-GAAP diluted EPS, guidance | $ | 0.23 | $ | 0.31 | ||
Contact | Caitlin Cooper Gursslin | |
Investor Relations | ||
(512) 683-8456 | ||
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