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National Instruments Announces Record Revenues and 20 Percent Earnings Growth in First Quarter 1999

AUSTIN, Texas -- April 27, 1999 -- National Instruments (NASDAQ:NATI) today announced record revenues of $73.7 million for the first quarter of 1999, and 20 percent earnings growth.

"We are proud to deliver record revenues and solid earnings growth," said Dr. James Truchard, President and CEO. "Our double-digit revenue growth through four quarters of the industry downturn indicates that our computer-based approach gained market share, and our profitability puts us in a very strong position to leverage those gains and make a greater investment in core growth areas."

Revenues for the first quarter were $73.7 million, up 13 percent from $65.4 million in the first quarter of 1998. Geographically, the breakdown of growth for the quarter compared to the first quarter of 1998 was as follows: Asia/Pacific, 29 percent revenue growth (16 percent in local currencies); Europe, 24 percent revenue growth (21 percent in local currencies); and North America 5 percent revenue growth.

Excluding the cumulative effect of a change in accounting policy related to the adoption of FAS133, net income for the quarter was $10.6 million, up 20 percent from $8.8 million a year ago. The Company reported basic earnings per share, before the effect of this change in accounting policy, of $0.32 for the first quarter of 1999 compared to basic earnings per share of $0.27 in the first quarter of 1998. National Instruments reported diluted earnings per share, before the effect of this change in accounting policy, of $0.31 on 34.2 million weighted average shares outstanding, compared with diluted earnings per share of $0.26 on 34.1 million weighted average shares outstanding in the first quarter of 1998.

"After four difficult quarters for the test and measurement industry, we generated a record of $13 million in free cash during the first quarter of 1999," said Alex Davern, Chief Financial Officer. "As we discussed in January, we anticipate a turnaround in the industry this year, and we will continue to invest aggressively to fuel our long-term growth."

This release contains "forward-looking statements" (as defined under securities laws) regarding an expected turnaround in the industry in 1999, the company's expenditures in 1999, and the performance of the company, which are subject to a number of risks and uncertainties. Actual results may differ materially from the expected results. Specific risks include the Asian economies not improving or even worsening; risk that there may be no turnaround in the Automated Test Equipment and semiconductor industries or in the test and measurement industry; and risk with regard to the Company's expanded sales force being able to execute effectively. The Company directs you to documents filed with the SEC for risks associated with the company's future performance.

National Instruments, a leading supplier of computer-based measurement and automation products, manufactures hundreds of software and hardware products which, when combined with industry-standard computers, are used for test, measurement, and industrial automation applications.

National Instruments stock is traded on the NASDAQ National Market System under the symbol NATI. Investment information may be obtained from the company's Investor Relations Department at (512) 683-5090, by sending e-mail to nati@ni.com, or on the Web at www.ni.com/nati Interested parties may listen to a replay of the National Instruments quarterly conference call starting Tuesday, April 27 at 7 p.m. through Friday, April 30 at midnight by calling (719) 457-0820; confirmation code # 651865.

The condensed consolidated statement of income and balance sheets to follow.



National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

March 31,
1999
December 31,
1998
ASSETS
Current assets:
Cash and cash equivalents $ 61,244 $ 51,538
Marketable securities 52,492 49,158
Accounts receivable, net 47,156 45,622
Inventories 16,304 16,454
Other current assets 12,897 11,624
Total current assets 190,093 174,396
Property and equipment, net 65,260 66,131
Intangibles and other assets 8,775 9,259
Total assets $264,128 $249,786
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 881 $ 849
Accounts payable 18,160 17,242
Accrued expenses 25,484 22,795
Total current liabilities 44,525 40,886
Long-term debt 4,145 4,379
Deferred income taxes 337 337
Total liabilities 49,007 45,602
Stockholders' equity:
Common stock 333 329
Additional paid-in capital 52,194 51,662
Retained earnings 163,609 153,601
Other (1,015) (1,408)
Total stockholders' equity 215,121 204,184
Total liabilities and stockholders' equity $264,128 $249,786

National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)

Three Months
Ended March 31,
(unaudited)
1999 1998
Net sales $73,686 $65,353
Cost of sales 16,940 15,569
Gross profit 56,746 49,784
Operating expenses:
Sales and marketing 27,023 24,530
Research and development 9,250 7,750
General and administrative 5,307 4,720
Total operating expenses 41,580 37,000
Operating income 15,166 12,784
Interest income, net 942 670
Foreign exchange (loss) gain, net (579) (274)
Income before income taxes and
cumulative effect of accounting change
15,529 13,180
Provision for income taxes 4,969 4,349
Income before cumulative
effect of accounting change
10,560 8,831
Cumulative effect of accounting change (552) ---
Net income $10,008 $8,831
Basic earnings per share $ 0.30 $0.27
Diluted earnings per share $ 0.29 $0.26
Weighted average shares
outstanding -- basic
32,989 32,668
Weighted average shares
outstanding -- diluted
34,226 34,100

Contact:

Tara Mason
Investor Relations
National Instruments
(512) 683-6873
Alex Davern
Chief Financial Officer
National Instruments
(512) 683-6977


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