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National Instruments Reports Record Revenues and Earnings


11th Consecutive Quarter and 24th Consecutive Year of Record Revenue

AUSTIN, Texas -- Jan. 18, 2001 -- National Instruments (NASDAQ: NATI), a leading provider of measurement and automation solutions, today announced record revenue of $114 million for the fourth quarter of 2000. Revenue grew by 22 percent in U.S. dollar terms and by 26 percent in constant currency terms.

"Strong demand and world-class execution led us to our 11th consecutive quarter and 24th consecutive year of record revenues, " said James Truchard, NI President and CEO. "We met our aggressive goals for R&D investment, and customer reaction to our latest products indicates that our vision and execution have been right on target and right on time. We are confident and optimistic that the value we can deliver to our customers today is the highest in our history, and our success going forward is primarily a matter of our own execution."

Excluding a charge for anticipated patent defense costs, net income for Q4 2000 was a record $16.6 million compared to net income of $14.0 million in Q4 1999. Excluding this charge, NI reported record basic earnings per share of $0.33 and record diluted earnings per share of $0.31 for Q4 2000.

Quarterly Highlights

  • Fourth-quarter revenue of $114 million marked 11th consecutive quarter of record revenue
  • LabVIEW 6i software had record revenue
  • NI among FORTUNE 100 Best Places to Work For second consecutive year
  • NI listed among top three vendor Web sites for North American electronics engineers, according to EDN magazine and Cahners Research

2000 Highlights

  • Revenue totaled $410 million
  • Gross margins equaled 76 percent while successfully managing component shortages
  • More than 24,000 companies worldwide purchased NI products
  • Cahners Electronics Group named NI the number one company to watch in 2001
  • Excluding an acquisition charge in 1999, NI increased R&D investment by 29 percent and met goal of investing 14 percent of revenue in R&D

Geographically, the breakdown of revenue growth in USD for Q4 2000 as compared to Q4 1999 was as follows: Americas, 20 percent revenue growth; Europe, 15 percent revenue growth; and Asia, 51 percent revenue growth. In constant currency terms, revenue was up 27 percent in Europe, 44 percent in Asia, and 26 percent worldwide.

"The year 2000 was another in a long succession of strong financial performances for NI," said Alex Davern, CFO of NI. "With the diversity of our business across industries, geographies, and customers; strong demand for our expanded product portfolio; and solid execution throughout the Company, we delivered more than 20 percent growth on both the top and bottom lines and achieved our goal of investing 14 percent of revenue in R&D."

Also, the year 2000 was the 24th consecutive year of double-digit growth for NI. Revenues of $410 million were up 24 percent from $330 million in 1999. Excluding the charge for anticipated patent defense costs, net income for 2000 was a record $56.9 million, up 26 percent from $45.2 million in 1999, and diluted earnings per share for 2000 was a record $1.06, compared to $0.87 in 1999.

Currently, NI expects revenues for Q1 2001 to be in the range of $111 million to $117 million and diluted earnings per share for the quarter in the range of $0.28 to $0.30. This compares to revenue and diluted earnings per share for Q1 2000 of $94.1 million and $0.24 respectively. For 2001, NI currently expects record revenues in the range of $480 million to $510 million and record diluted EPS in the range of $1.24 to $1.32 per share.

About NI
NI leverages commercial technologies, such as industry-standard computers and the Internet, to deliver customer-defined measurement and automation solutions. Headquartered in Austin, Texas, NI has more than 2,500 employees and direct sales offices in more than 30 countries. NI is increasing the productivity of engineers and scientists worldwide by delivering easy-to-integrate software and modular hardware. In fiscal year 2000, NI recorded its 24th consecutive year of double-digit growth with net revenue totaling $410 million. For the past two consecutive years, FORTUNE magazine has named NI one of the 100 best companies to work for in America.

NI 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 ni.com/nati

Beginning Thursday, Jan. 18, 2001 at 7:00 p.m. CST through Thursday, Jan. 25, 2001 at 12:00 a.m. CST, interested parties also may listen to a replay of the NI quarterly conference call by visiting the Company's Web site at ni.com/call or by calling (719) 457-0820; confirmation code #434733.

This release contains "forward-looking statements," including predictions of future financial performance, which are subject to a number of risks and uncertainties, including a potential slowdown in the global economy, risks of component shortages, and foreign exchange fluctuations. Actual results may differ materially from the expected results. The Company directs you to documents filed with the SEC for risks associated with the Company's future performance.

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


National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

December 31,
2000
(unaudited) 		December 31,
1999
ASSETS
Current assets:
Cash and cash equivalents $ 75,277 $ 45,309
Short-term investments 79,525 83,525
Accounts receivable, net 74,704 58,279
Inventories 33,292 26,161
Other current assets 21,761 17,755
Total current assets 284,559 231,029
Property and equipment, net 84,694 69,771
Intangibles and other assets 20,097 17,953
Total assets $389,350 $318,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $      -- $ 876
Accounts payable 30,365 23,318
Accrued expenses 33,986 33,074
Total current liabilities 64,351 57,268
Long-term debt      -- 4,301
Deferred income taxes 3,976 2,949
Total liabilities 68,327 64,518
Stockholders' equity:
Common stock 507 500
Additional paid-in capital 69,534 58,830
Retained earnings 254,006 198,849
Accumulated other comprehensive loss (3,024) (3,944)
Total stockholders' equity 321,023 254,235
Total liabilities and stockholders' equity $389,350 $318,753

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

Three Months
Ended December 31,
(unaudited) 		Year
Ended December 31,
(unaudited)
2000 1999 2000 1999
Net sales $114,247 $93,396 $410,149 $329,583
Cost of sales 27,640 21,433 98,326 76,040
Gross profit 86,607 71,963 311,823 253,543
Operating expenses:
Sales and marketing 40,871 34,208 147,377 120,886
Research and development 15,165 11,935 55,954 45,531
Accrued legal costs 2,500      -- 2,500      --
General and administrative 8,288 6,842 29,577 24,258
Total operating expenses 66,824 52,985 235,408 190,675
Operating income 19,783 18,978 76,415 62,868
Interest income, net 1,789 1,437 5,857 4,355
Foreign exchange gain (loss), net 287 228 (1,159) 130
Income before income taxes and
 cumulative effect of accounting
 change 		21,859 20,643 81,113 67,353
Provision for income taxes 6,995 6,606 25,956 21,553
Income before cumulative effect
 of accounting change 		14,864 14,037 55,157 45,800
Cumulative effect of accounting
 change 		     --      --       -- (552)
Net income $14,864 $14,037 $55,157 $45,248
Basic earnings per share $0.29 $0.28 $1.10 $0.91
Weighted average shares
 outstanding -- basic 		50,567 50,029 50,332 49,776
Diluted earnings per share $0.28 $0.27 $1.03 $0.87
Weighted average shares
 outstanding -- diluted 		53,642 52,802 53,564 52,203

Contact:

Kimberly Allen
Investor Relations Manager
National Instruments
(512) 683-6873		 Kathleen Fisher
Business Communications Manager
National Instruments
(512) 683-5731


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