National Instruments Reports Record Revenue for a First Quarter of $300 Million
9 percent year over year order growth and strong operating leverage
Q1 2017 Highlights
-
Revenue of
$300 million , up 5 percent year over year with core revenue up 7 percent year over year - GAAP gross margin of 74.5 percent, up 100 basis points year over year
- Non-GAAP gross margin of 75.3 percent, up 55 basis points year over year
-
Fully diluted GAAP EPS of
$0.14 and fully diluted non-GAAP EPS of$0.21 - GAAP operating income up 61% year over year
- Non-GAAP operating income up 37% year over year
-
GAAP net income of
$18 million -
EBITDA of
$42 million -
Cash and short-term investments of
$365 million as ofMarch 31, 2017
In Q1 2017, NI received
GAAP net income for Q1 was
In Q1, GAAP gross margin was 74.5 percent and non-GAAP gross margin was
75.3 percent. Total GAAP operating expenses were
"I am pleased by the excellent execution and focus on growth by our
entire global team this quarter," 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, acquisition-related fair value adjustments, and restructuring charges. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.
Guidance
NI currently expects Q2 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, acquisition-related fair value adjustments, 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 Q1 2017 earnings conference call
with NI management today,
Forward-Looking Statements
This release contains "forward-looking statements" including statements
regarding excellent execution and focus on growth, improving industrial
economy and a sharp focus on key growth areas, that we will be
disciplined in our focus and execution to achieve our growth and
profitability goals, being encouraged by the strong order growth,
improved operating margin and the positive signs we are seeing in the
macroeconomic environment, leveraging our investments to drive sustained
revenue growth and being confident in our ability to continue to make
process toward our non-GAAP target of 18 percent operating margin,
expecting Q2 revenue to be in the range of
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)
|
||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands, unaudited) | ||||||||
|
|
|||||||
2017 | 2016 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 279,008 | 285,283 | ||||||
Short-term investments | 86,410 | 73,117 | ||||||
Accounts receivable, net | 224,267 | 228,686 | ||||||
Inventories, net | 194,878 | 193,608 | ||||||
Prepaid expenses and other current assets | 45,970 | 53,953 | ||||||
Total current assets | 830,533 | 834,647 | ||||||
Property and equipment, net | 260,208 | 260,456 | ||||||
|
254,523 | 253,197 | ||||||
Intangible assets, net | 113,188 | 108,663 | ||||||
Other long-term assets | 33,471 | 39,601 | ||||||
Total assets | 1,491,923 | 1,496,564 | ||||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | 55,850 | 48,800 | ||||||
Accrued compensation | 29,001 | 27,743 | ||||||
Deferred revenue - current | 121,597 | 115,577 | ||||||
Accrued expenses and other liabilities | 37,342 | 32,997 | ||||||
Other taxes payable | 19,739 | 34,958 | ||||||
Total current liabilities | 263,529 | 260,075 | ||||||
Long-term debt | 25,000 | 25,000 | ||||||
Deferred income taxes | 37,736 | 45,386 | ||||||
Liability for uncertain tax positions | 12,071 | 11,719 | ||||||
Deferred revenue - long-term | 30,024 | 29,752 | ||||||
Other long-term liabilities | 7,793 | 10,413 | ||||||
Total liabilities | 376,153 | 382,345 | ||||||
Stockholders' equity: | ||||||||
Preferred stock |
- |
- |
||||||
Common stock | 1,296 | 1,292 | ||||||
Additional paid-in capital | 785,666 | 771,346 | ||||||
Retained earnings | 361,327 | 376,202 | ||||||
Accumulated other comprehensive income (loss) | (32,519 | ) | (34,621 | ) | ||||
Total stockholders' equity | 1,115,770 | 1,114,219 | ||||||
Total liabilities and stockholders' equity | 1,491,923 | 1,496,564 | ||||||
|
|||||||||
Condensed Consolidated Statements of Income | |||||||||
(in thousands, except per share data, unaudited) | |||||||||
Three Months Ended |
|||||||||
|
|||||||||
2017 | 2016 | ||||||||
Net sales: | |||||||||
Product | $ | 271,512 | $ | 259,434 | |||||
Software maintenance | 28,594 | 27,743 | |||||||
Total net sales | 300,106 | 287,177 | |||||||
Cost of sales: | |||||||||
Product | 75,196 | 74,209 | |||||||
Software maintenance | 1,328 | 1,937 | |||||||
Total cost of sales | 76,524 | 76,146 | |||||||
Gross profit | 223,582 | 211,031 | |||||||
Operating expenses: | |||||||||
Sales and marketing | 117,258 | 113,207 | |||||||
Research and development | 58,263 | 59,340 | |||||||
General and administrative | 25,743 | 24,640 | |||||||
Total operating expenses | 201,264 | 197,187 | |||||||
Operating income | 22,318 | 13,844 | |||||||
Other income (expense): | |||||||||
Interest income | 343 | 253 | |||||||
Net foreign exchange loss | 82 | 574 | |||||||
Other (expense) income, net | 431 | (2,406 | ) | ||||||
Income before income taxes | 23,174 | 12,265 | |||||||
Provision for income taxes | 5,026 | 2,967 | |||||||
Net income | $ | 18,148 | $ | 9,298 | |||||
Basic earnings per share | $ | 0.14 | $ | 0.07 | |||||
Diluted earnings per share | $ | 0.14 | $ | 0.07 | |||||
Weighted average shares outstanding - | |||||||||
basic | 129,438 | 127,595 | |||||||
diluted | 130,108 | 128,103 | |||||||
Dividends declared per share | $ | 0.21 | $ | 0.20 | |||||
|
|||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
(in thousands, unaudited) | |||||||||
Three Months Ended |
|||||||||
2017 | 2016 | ||||||||
Cash flow from operating activities: | |||||||||
Net income | $ | 18,148 | 9,298 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 18,669 | 19,432 | |||||||
Stock-based compensation | 6,402 | 6,748 | |||||||
Tax benefit from deferred income taxes | (2,984 | ) | (6,915 | ) | |||||
Net change in operating assets and liabilities | 6,441 | 15,801 | |||||||
Net cash provided by operating activities | 46,676 | 44,364 | |||||||
Cash flow from investing activities: | |||||||||
Capital expenditures | (10,811 | ) | (9,267 | ) | |||||
Capitalization of internally developed software | (11,624 | ) | (8,003 | ) | |||||
Additions to other intangibles | (525 | ) | (363 | ) | |||||
Acquisitions, net of cash received | - | (549 | ) | ||||||
Purchases of short-term investments | (25,253 | ) | (5,008 | ) | |||||
Sales and maturities of short-term investments | 11,931 | 23,589 | |||||||
Net cash (used by)/provided in investing activities | (36,282 | ) | 399 | ||||||
Cash flow from financing activities: | |||||||||
Proceeds from revolving line of credit | - | - | |||||||
Principal payments on revolving line of credit | - | (12,000 | ) | ||||||
Proceeds from issuance of common stock | 7,817 | 7,445 | |||||||
Repurchase of common stock | - | (4,642 | ) | ||||||
Dividends paid | (27,201 | ) | (25,556 | ) | |||||
Net cash used by financing activities | (19,384 | ) | (34,753 | ) | |||||
Effect of exchange rate changes on cash | 2,715 | 4,261 | |||||||
Net change in cash and cash equivalents | (6,275 | ) | 14,271 | ||||||
Cash and cash equivalents at beginning of period | 285,283 | 251,129 | |||||||
Cash and cash equivalents at end of period | $ | 279,008 | 265,400 | ||||||
Detail 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 (in thousands, unaudited)
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Stock-based compensation | ||||||||||
Cost of sales | $ | 575 | $ | 548 | ||||||
Sales and marketing | 2,626 | 2,937 | ||||||||
Research and development | 2,054 | 2,349 | ||||||||
General and administrative | 1,224 | 908 | ||||||||
Provision for income taxes | (1,675 | ) | (2,093 | ) | ||||||
Total | $ | 4,804 | $ | 4,649 | ||||||
Amortization of acquisition intangibles | ||||||||||
Cost of sales | $ | 1,590 | $ | 3,042 | ||||||
Sales and marketing | 478 | 819 | ||||||||
Research and development | 263 | 261 | ||||||||
Other income, net | - | - | ||||||||
Provision for income taxes | (554 | ) | 221 | |||||||
Total | $ | 1,777 | $ | 4,343 | ||||||
Acquisition transaction costs, restructuring charges, and other | ||||||||||
Cost of sales | $ | 336 | $ | 106 | ||||||
Sales and marketing | 2,375 | 57 | ||||||||
Research and development | 399 | 258 | ||||||||
General and administrative | 177 | 30 | ||||||||
Foreign exchange loss on acquisition | - | 94 | ||||||||
Taxes levied on transfer of acquired intellectual property | - | 2,474 | ||||||||
Provision for income taxes | (1,065 | ) | (1,041 | ) | ||||||
Total | $ | 2,222 | $ | 1,978 | ||||||
|
||||||||||
Reconciliation of GAAP to Non-GAAP Measures | ||||||||||
(in thousands, unaudited) | ||||||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit | ||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Gross profit, as reported | $ | 223,582 | $ | 211,031 | ||||||
Stock-based compensation | 575 | 548 | ||||||||
Amortization of acquisition intangibles | 1,590 | 3,042 | ||||||||
Acquisition transaction costs, restructuring charges and other | 336 | 106 | ||||||||
Non-GAAP gross profit | $ | 226,083 | $ | 214,727 | ||||||
Non-GAAP gross margin | 75 | % | 75 | % | ||||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | ||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Operating expenses, as reported | $ | 201,264 | $ | 197,187 | ||||||
Stock-based compensation | (5,904 | ) | (6,194 | ) | ||||||
Amortization of acquisition intangibles | (741 | ) | (1,080 | ) | ||||||
Acquisition transaction costs, restructuring charges and other | (2,951 | ) | (345 | ) | ||||||
Non-GAAP operating expenses | $ | 191,668 | $ | 189,568 | ||||||
Reconciliation of Operating Income to Non-GAAP Operating Income | ||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Operating income, as reported | $ | 22,318 | $ | 13,844 | ||||||
Stock-based compensation | 6,479 | 6,742 | ||||||||
Amortization of acquisition intangibles | 2,331 | 4,122 | ||||||||
Acquisition transaction costs, restructuring charges and other | 3,287 | 451 | ||||||||
Non-GAAP operating income | $ | 34,415 | $ | 25,159 | ||||||
Non-GAAP operating margin | 11.5 | % | 8.8 | % | ||||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes |
||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Income before income taxes, as reported | $ | 23,174 | $ | 12,265 | ||||||
Stock-based compensation | 6,479 | 6,742 | ||||||||
Amortization of acquisition intangibles | 2,331 | 4,122 | ||||||||
Acquisition transaction costs, restructuring charges and other | 3,287 | 451 | ||||||||
Foreign exchange loss on acquisitions | - | 94 | ||||||||
Taxes levied on transfer of acquired intellectual property | - | 2,474 | ||||||||
Non-GAAP income before income taxes | $ | 35,271 | $ | 26,148 | ||||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes | ||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Provision for income taxes, as reported | $ | 5,026 | $ | 2,967 | ||||||
Stock-based compensation | 1,675 | 2,093 | ||||||||
Amortization of acquisition intangibles | 554 | (221 | ) | |||||||
Acquisition transaction costs, restructuring charges and other | 1,065 | 1,041 | ||||||||
Non-GAAP provision for income taxes | $ | 8,320 | $ | 5,880 | ||||||
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 | ||||||||
|
||||||||
2017 | 2016 | |||||||
Net income, as reported | $ | 18,148 | $ | 9,298 | ||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||
Stock-based compensation, net of tax effect | 4,804 | 4,649 | ||||||
Amortization of acquisition intangibles, net of tax effect | 1,777 | 4,343 | ||||||
Acquisition transaction costs, restructuring charges and other, net of tax effect | 2,222 | 1,978 | ||||||
Non-GAAP net income | $ | 26,951 | $ | 20,268 | ||||
Basic EPS, as reported | $ | 0.14 | $ |
0.07 |
||||
Adjustment to reconcile basic EPS to non-GAAP basis EPS: | ||||||||
Impact of stock-based compensation, net of tax effect | 0.04 | 0.04 | ||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.01 | 0.03 | ||||||
Impact of acquisition transaction costs, restructuring charges and other, net of tax effect | 0.02 | 0.02 | ||||||
Non-GAAP basic EPS | $ | 0.21 | $ | 0.16 | ||||
Diluted EPS, as reported | $ | 0.14 | $ | 0.07 | ||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS: | ||||||||
Impact of stock-based compensation, net of tax effect | 0.04 | 0.04 | ||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.01 | 0.03 | ||||||
Impact of acquisition transaction costs, restructuring charges and other, net of tax effect | 0.02 | 0.02 | ||||||
Non-GAAP diluted EPS | $ | 0.21 | $ | 0.16 | ||||
Weighted average shares outstanding - | ||||||||
Basic | 129,438 | 127,595 | ||||||
Diluted | 130,108 | 128,103 | ||||||
|
||||||||||
Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS | ||||||||||
(in thousands, except per share data, unaudited) | ||||||||||
Three Months Ended | ||||||||||
|
||||||||||
2017 | 2016 | |||||||||
Net income, as reported | $ | 18,148 | $ | 9,298 | ||||||
Adjustments to reconcile net income to EBITDA: | ||||||||||
Interest income, net of interest expense | (86 | ) | (62 | ) | ||||||
Tax expense | 5,026 | 2,967 | ||||||||
Depreciation and amortization | 18,669 | 19,432 | ||||||||
EBITDA | $ | 41,757 | $ | 31,635 | ||||||
Weighted average shares outstanding - Diluted | 130,108 | 128,103 | ||||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
|
||||||||
Low | High | |||||||
GAAP Fully Diluted EPS, guidance | $ | 0.12 | $ | 0.26 | ||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS: | ||||||||
Impact of stock-based compensation, net of tax effect |
0.03 |
0.03 |
||||||
Impact of amortization of acquisition intangibles, restructuring charges and other, net of tax effect |
0.04 |
0.04 |
||||||
Non-GAAP diluted EPS, guidance | $ | 0.19 | $ | 0.33 | ||||
|
|||||
Reconciliation of GAAP Revenue Growth to Core Revenue Growth | |||||
(unaudited) | |||||
Three Months Ended | |||||
|
|||||
2017 | |||||
YoY GAAP revenue growth, as reported |
|
4.5 | % | ||
Effect of excluding our current largest customer | 1.7 | % | |||
YoY GAAP revenue growth, excluding our largest customer | 6.2 | % | |||
Effect of excluding the impact of foreign currency exchange | 0.4 | % | |||
YoY Core revenue growth |
|
6.6 | % | ||
|
|||||
Reconciliation of GAAP Revenue Growth Guidance to Core Revenue Growth Guidance | |||||
(unaudited) | |||||
Three Months Ended | |||||
|
|||||
2017 | |||||
Expected YoY GAAP revenue growth |
|
5 | % | ||
Expected effect of excluding our current largest customer | 2 | % | |||
Expected YoY GAAP revenue growth, excluding our largest customer | 7 | % | |||
Expected effect of excluding the impact of foreign currency exchange | 1 | % | |||
Expected YoY Core revenue growth |
|
8 | % | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427006589/en/
Source:
News Provided by Acquire Media