National Instruments Reports Revenue of $311 Million in the First Quarter
Backlog increase in Q1 of
Q1 2019 Highlights
-
Revenue of
$311 million , flat year over year, with increased backlog of$10 million - GAAP gross margin of 76 percent and non-GAAP gross margin of 78 percent
-
GAAP net income of
$23 million , down 4 percent year over year -
Non-GAAP net income of
$40 million , up 21 percent year over year -
Fully diluted GAAP EPS of
$0.17 , and fully diluted non-GAAP EPS of$0.30 which was at the midpoint of the company's guidance -
EBITDA of
$42 million -
Cash and short-term investments of
$480 million as ofMarch 31, 2019 -
Cash flow from operating activities of
$277 million for the twelve months endedMarch 31, 2019 , up 27 percent year over year -
1.035 million shares of common stock repurchased at approximately
$45 per share
In Q1 2019, the value of the company’s orders over
GAAP net income for Q1 was
In Q1, GAAP gross margin was 76 percent and non-GAAP gross margin was 78
percent. Total Q1 GAAP operating expenses were
“I am proud of the team’s execution in the first quarter, despite the
weakened industrial economy, especially in
Geographic revenue in U.S. dollar terms for Q1 2019 compared with Q1
2018 was up 2 percent in the
As of
The company’s non-GAAP results exclude, as applicable, 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, restructuring charges, tax reform charges, and capitalization and amortization of internally developed software costs. 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 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
In the quarter ended
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, restructuring charges, tax reform charges, and capitalization and amortization of internally developed software 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 discloses the company’s EBITDA for the three-month
periods ending
Conference Call Information
Interested parties can listen to the Q1 2019 earnings conference call
with NI management today,
Forward-Looking Statements
This release contains “forward-looking statements” including statements
that we remain focused on our long-term strategy, that we believe we are
well positioned to deliver record non-GAAP net income in 2019, our
belief that our strong gross margins remain a testament to the value of
our brand and the benefits our platform provides to our customers, that
we remain focused on key industries where we believe our platform is
best suited to take advantage of major technology disruptions, our Q2
revenue guidance, expecting that GAAP fully diluted EPS will be in the
range of
The company directs readers to its Form 10-K for the year ended
About NI
NI (ni.com) develops high-performance automated test and automated measurement systems to help you solve your engineering challenges now and into the future. Our open, software-defined platform uses modular hardware and an expansive ecosystem to help you turn powerful possibilities into real solutions. (NATI-F)
National Instruments | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(in thousands) | |||||||||||
March 31, | December 31, | ||||||||||
2019 | 2018 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 228,766 | $ | 259,386 | |||||||
Short-term investments | 251,297 | 271,396 | |||||||||
Accounts receivable, net | 215,012 | 242,955 | |||||||||
Inventories, net | 204,710 | 194,146 | |||||||||
Prepaid expenses and other current assets | 66,434 | 54,337 | |||||||||
Total current assets | 966,219 | 1,022,220 | |||||||||
Property and equipment, net | 228,164 | 245,201 | |||||||||
Goodwill | 262,384 | 264,530 | |||||||||
Intangible assets, net | 104,066 | 110,783 | |||||||||
Operating lease ROU assets | 70,861 | — | |||||||||
Other long-term assets | 39,644 | 28,501 | |||||||||
Total assets | $ | 1,671,338 |
$ |
1,671,235 |
|||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 50,576 | $ | 48,388 | |||||||
Accrued compensation | 35,148 | 45,821 | |||||||||
Deferred revenue - current | 130,336 | 127,288 | |||||||||
Operating lease liabilities - current | 16,088 | — | |||||||||
Other current liabilities | 27,807 | 25,913 | |||||||||
Other taxes payable | 28,001 | 35,574 | |||||||||
Total current liabilities | 287,956 | 282,984 | |||||||||
Deferred income taxes | 24,268 | 25,457 | |||||||||
Liability for uncertain tax positions | 8,025 | 9,775 | |||||||||
Income tax payable - non-current | 74,546 | 74,546 | |||||||||
Deferred revenue - non-current | 32,393 | 32,636 | |||||||||
Operating lease liabilities - non-current | 38,154 | — | |||||||||
Other long-term liabilities | 4,743 | 7,479 | |||||||||
Total liabilities | $ | 470,085 | $ | 432,877 | |||||||
Stockholders' equity: | |||||||||||
Preferred stock | $ | — | $ | — | |||||||
Common stock | 1,319 | 1,327 | |||||||||
Additional paid-in capital | 910,602 | 897,544 | |||||||||
Retained earnings | 307,153 | 356,418 | |||||||||
Accumulated other comprehensive loss | (17,821 | ) | (16,931 | ) | |||||||
Total stockholders' equity | 1,201,253 | 1,238,358 | |||||||||
Total liabilities and stockholders' equity | $ | 1,671,338 | $ | 1,671,235 | |||||||
National Instruments | |||||||||||
Condensed Consolidated Statements of Income | |||||||||||
(in thousands, except per share data, unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Net sales: | |||||||||||
Product | $ | 277,702 | $ | 280,359 | |||||||
Software maintenance | 33,372 | 31,538 | |||||||||
Total net sales | 311,074 | 311,897 | |||||||||
Cost of sales: | |||||||||||
Product | 74,188 | 72,317 | |||||||||
Software maintenance | 1,887 | 2,206 | |||||||||
Total cost of sales | 76,075 | 74,523 | |||||||||
Gross profit | 234,999 | 237,374 | |||||||||
Operating expenses: | |||||||||||
Sales and marketing | 117,551 | 120,117 | |||||||||
Research and development | 66,166 | 61,843 | |||||||||
General and administrative | 27,883 | 27,277 | |||||||||
Total operating expenses | 211,600 | 209,237 | |||||||||
Operating income | 23,399 | 28,137 | |||||||||
Other income (expense): | |||||||||||
Interest income | 2,234 | 1,015 | |||||||||
Net foreign exchange gain | 366 | 979 | |||||||||
Other loss, net |
(24 | ) | (519 | ) | |||||||
Income before income taxes | 25,975 | 29,612 | |||||||||
Provision for income taxes | 2,755 | 5,344 | |||||||||
Net income | $ | 23,220 | $ | 24,268 | |||||||
Basic earnings per share | $ | 0.18 | $ | 0.19 | |||||||
Diluted earnings per share | $ | 0.17 | $ | 0.18 | |||||||
Weighted average shares outstanding - | |||||||||||
Basic | 132,252 | 131,127 | |||||||||
Diluted | 133,367 | 132,624 | |||||||||
Dividends declared per share |
$ |
0.25 |
$ |
0.23 | |||||||
National Instruments | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
(in thousands, unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Cash flow from operating activities: | |||||||||||
Net income | $ | 23,220 | $ | 24,268 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 18,012 | 17,436 | |||||||||
Stock-based compensation | 11,034 | 8,204 | |||||||||
Tax benefit from deferred income taxes | (1,650 | ) | (2,046 | ) | |||||||
Net change in operating assets and liabilities | (8,469 | ) | (7,879 | ) | |||||||
Net cash provided by operating activities | 42,147 | 39,983 | |||||||||
Cash flow from investing activities: | |||||||||||
Capital expenditures | (10,936 | ) | (8,115 | ) | |||||||
Capitalization of internally developed software | (2,279 | ) | (7,668 | ) | |||||||
Additions to other intangibles | (106 | ) | (2,855 | ) | |||||||
Acquisition of equity-method investment | (9,784 | ) | — | ||||||||
Purchases of short-term investments | (60,094 | ) | (52,355 | ) | |||||||
Sales and maturities of short-term investments | 81,151 | 10,211 | |||||||||
Net cash used by investing activities | (2,048 | ) | (60,782 | ) | |||||||
Cash flow from financing activities: | |||||||||||
Proceeds from issuance of common stock | 9,213 | 8,600 | |||||||||
Repurchase of common stock | (46,404 | ) | — | ||||||||
Dividends paid | (33,110 | ) | (30,177 | ) | |||||||
Net cash used by financing activities | (70,301 | ) | (21,577 | ) | |||||||
Impact of changes in exchange rates on cash | (418 | ) | 2,577 | ||||||||
Net change in cash and cash equivalents | (30,620 | ) | (39,799 | ) | |||||||
Cash and cash equivalents at beginning of period | 259,386 | 290,164 | |||||||||
Cash and cash equivalents at end of period | $ | 228,766 | $ | 250,365 | |||||||
The following tables provide details with respect to the amount of GAAP charges related to stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, restructuring charges, and capitalization and amortization of internally developed software costs that were recorded in the line items indicated below (unaudited) (in thousands) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Stock-based compensation | |||||||||||
Cost of sales | $ | 793 | $ | 724 | |||||||
Sales and marketing | 4,375 | 3,338 | |||||||||
Research and development | 3,550 | 2,518 | |||||||||
General and administrative | 2,316 | 1,623 | |||||||||
Provision for income taxes | (1,836 | ) | (1,658 | ) | |||||||
Total | $ | 9,198 | $ | 6,545 | |||||||
Amortization of acquisition intangibles | |||||||||||
Cost of sales | $ | 851 | $ | 902 | |||||||
Sales and marketing | 499 | 537 | |||||||||
Research and development | 28 | 28 | |||||||||
Provision for income taxes | (194 | ) | (192 | ) | |||||||
Total | $ | 1,184 | $ | 1,275 | |||||||
Acquisition transaction costs, restructuring charges, and other | |||||||||||
Cost of sales | $ | — | $ | 28 | |||||||
Sales and marketing | 2,143 | 1,645 | |||||||||
Research and development | 345 | 209 | |||||||||
General and administrative | 912 | 612 | |||||||||
Provision for income taxes | (840 | ) | (553 | ) | |||||||
Total | $ | 2,560 | $ | 1,941 | |||||||
Capitalization and amortization of internally developed software costs | |||||||||||
Cost of Sales | $ | 6,582 | $ | 5,829 | |||||||
Research and Development | (2,280 | ) | (7,667 | ) | |||||||
Provision for income taxes | (903 | ) | 386 | ||||||||
Total | $ | 3,399 | $ | (1,452 | ) | ||||||
National Instruments | |||||||||||
Reconciliation of GAAP to Non-GAAP Measures | |||||||||||
(in thousands, unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit | |||||||||||
Gross profit, as reported | $ | 234,999 | $ | 237,374 | |||||||
Stock-based compensation | 793 | 724 | |||||||||
Amortization of acquisition intangibles | 851 | 902 | |||||||||
Acquisition transaction costs, restructuring charges, and other | — | 28 | |||||||||
Amortization of internally developed software costs | 6,582 | 5,829 | |||||||||
Non-GAAP gross profit | $ | 243,225 | $ | 244,857 | |||||||
Non-GAAP gross margin | 78.2 | % | 78.5 | % | |||||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | |||||||||||
Operating expenses, as reported | $ | 211,600 | $ | 209,237 | |||||||
Stock-based compensation | (10,241 | ) | (7,479 | ) | |||||||
Amortization of acquisition intangibles | (527 | ) | (565 | ) | |||||||
Acquisition transaction costs, restructuring charges, and other | (3,400 | ) | (2,466 | ) | |||||||
Capitalization of internally developed software costs | 2,280 | 7,667 | |||||||||
Non-GAAP operating expenses | $ | 199,712 | $ | 206,394 | |||||||
Reconciliation of Operating Income to Non-GAAP Operating Income | |||||||||||
Operating income, as reported | $ | 23,399 | $ | 28,137 | |||||||
Stock-based compensation | 11,034 | 8,203 | |||||||||
Amortization of acquisition intangibles | 1,378 | 1,467 | |||||||||
Acquisition transaction costs, restructuring charges, and other | 3,400 | 2,494 | |||||||||
Net amortization (capitalization) of internally developed software costs | 4,302 | (1,838 | ) | ||||||||
Non-GAAP operating income | $ | 43,513 | $ | 38,463 | |||||||
Non-GAAP operating margin | 14.0 | % | 12.3 | % | |||||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes | |||||||||||
Income before income taxes, as reported | $ | 25,975 | $ | 29,612 | |||||||
Stock-based compensation | 11,034 | 8,203 | |||||||||
Amortization of acquisition intangibles | 1,378 | 1,467 | |||||||||
Acquisition transaction costs, restructuring charges, and other | 3,400 | 2,494 | |||||||||
Net amortization (capitalization) of internally developed software costs | 4,302 | (1,838 | ) | ||||||||
Non-GAAP income before income taxes | $ | 46,089 | $ | 39,938 | |||||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes | |||||||||||
Provision for income taxes, as reported | $ | 2,755 | $ | 5,344 | |||||||
Stock-based compensation | 1,836 | 1,658 | |||||||||
Amortization of acquisition intangibles | 194 | 192 | |||||||||
Acquisition transaction costs, restructuring charges, and other | 840 | 553 | |||||||||
Capitalization and amortization, net of tax | 903 | (386 | ) | ||||||||
Non-GAAP provision for income taxes | $ | 6,528 | $ | 7,361 | |||||||
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 | ||||||||||
March 31, | ||||||||||
2019 | 2018 | |||||||||
Net income, as reported | $ | 23,220 | $ | 24,268 | ||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||||
Stock-based compensation, net of tax effect | 9,198 | 6,545 | ||||||||
Amortization of acquisition intangibles, net of tax effect | 1,184 | 1,275 | ||||||||
Acquisition transaction costs, restructuring, and other, net of tax effect | 2,560 | 1,941 | ||||||||
Net amortization/(capitalization) of internally developed software costs, net of tax | 3,399 | (1,452 | ) | |||||||
Non-GAAP net income | $ | 39,561 | $ | 32,577 | ||||||
Basic EPS, as reported | $ | 0.18 | $ | 0.19 | ||||||
Adjustment to reconcile basic EPS to non-GAAP | ||||||||||
basic EPS: | ||||||||||
Impact of stock-based compensation, net of tax effect | 0.07 | 0.05 | ||||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.01 | 0.01 | ||||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect | 0.02 | 0.01 | ||||||||
Impact of (capitalization)/amortization of internally developed software costs, net of tax effect | 0.02 | (0.01 | ) | |||||||
Non-GAAP basic EPS | $ | 0.30 | $ | 0.25 | ||||||
Diluted EPS, as reported | $ | 0.17 | $ | 0.18 | ||||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS | ||||||||||
Impact of stock-based compensation, net of tax effect | 0.07 | 0.05 | ||||||||
Impact of amortization of acquisition intangibles, net of tax effect | 0.01 | 0.01 | ||||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect | 0.02 | 0.02 | ||||||||
Impact of amortization/(capitalization) of internally developed software costs, net of tax effect | 0.03 | (0.01 | ) | |||||||
Non-GAAP diluted EPS | $ | 0.30 | $ | 0.25 | ||||||
Weighted average shares outstanding - | ||||||||||
Basic | 132,252 | 131,127 | ||||||||
Diluted | 133,367 | 132,624 | ||||||||
National Instruments | |||||||||||
Reconciliation of Net Income to EBITDA | |||||||||||
(in thousands, unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Net income, as reported | $ | 23,220 | $ | 24,268 | |||||||
Adjustments to reconcile net income to EBITDA: | |||||||||||
Interest income, net | (2,220 | ) | (927 | ) | |||||||
Tax expense | 2,755 | 5,344 | |||||||||
Depreciation and amortization | 18,012 | 17,436 | |||||||||
EBITDA | $ | 41,767 | $ | 46,121 | |||||||
Weighted average shares outstanding - Diluted | 133,367 | 132,624 | |||||||||
National Instruments | |||||||||||
Reconciliation of Cash Flow from Operations to Non-GAAP Free Cash Flow | |||||||||||
(in thousands, unaudited) | |||||||||||
TTM1 Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Cash Flow From Operations, as reported | $ | 276,744 | $ | 217,748 | |||||||
Less: Capital Expenditures, as reported | (40,130 | ) | (32,274 | ) | |||||||
Non-GAAP Free Cash Flow | $ | 236,614 | $ | 185,474 | |||||||
1 TTM represents trailing twelve months and a simple summation of the current and the immediate past three quarters information. | |||||||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2019 | |||||||||||
Low | High | ||||||||||
GAAP Fully Diluted EPS, guidance |
$ |
0.16 |
$ |
0.30 | |||||||
Adjustment to reconcile diluted EPS to non-GAAP | |||||||||||
diluted EPS: | |||||||||||
Impact of stock-based compensation, net of tax effect | 0.07 | 0.07 | |||||||||
Impact of amortization of acquisition intangibles and acquisition accounting adjustments, net of tax effect | 0.01 | 0.01 | |||||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect | 0.02 | 0.02 | |||||||||
Impact of capitalization and amortization of internally developed software costs, net of tax effect |
0.02 | 0.02 | |||||||||
Non-GAAP diluted EPS, guidance | $ | 0.28 | $ | 0.42 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190430006073/en/
Source:
Marissa Vidaurri
Investor Relations
(512) 683-5215