National Instruments Delivers 11 Percent Sequential Revenue Growth in Q4Operating Income Rises 53 Percent Sequentially
AUSTIN, Texas -- Jan. 23, 2002 -- National Instruments (NASDAQ: NATI) today announced revenue of $94.4 million for the fourth quarter of 2001 -- up 11 percent from the third quarter of 2001 -- with diluted earnings per share (EPS) of 14 cents. Operating income for the quarter was $10.0 million, up 53 percent from $6.5 million in the previous quarter.
"We managed our business very effectively throughout 2001, successfully adjusting our expenses to reflect our revenue, " said Alex Davern, CFO of NI. "This enabled us to deliver solid profitability and record annual cash flow from operations of $57 million."
Q4 2001 Highlights
- Solid profitability with diluted EPS of 14 cents
- Delivered 11 percent operating margins
- Strong growth in PXI hardware and LabVIEW Real-Time software
- TestStand software named one of year's best test products by Test & Measurement World
- Continued investment in strategic R&D and sales initiatives
During Q4, NI's revenue from instrument control products showed signs of stabilization while revenue from the company's computer-based measurement and automation products increased 14 percent from Q3 2001 and now represents 82 percent of revenue. Geographically, the breakdown of revenue in U.S. dollar terms for Q4 2001 as compared to Q4 2000 was as follows: Americas, down 23 percent; Europe, down 14 percent; Asia, down 8 percent; and down 17 percent worldwide. In local currency terms, revenue was down 9 percent in Europe, down 6 percent in Asia, and down 16 percent worldwide.
"While 2001 proved very challenging, we continued to aggressively invest in our key strategic initiatives and started 2002 with the introduction of LabVIEW 6.1, the latest-generation of our flagship software product," said James Truchard, NI President and CEO. "In addition, we recently held our worldwide sales conference here in Austin where we previewed many of the exciting new products we are working on for the coming year. Feedback from our sales force affirmed these new product initiatives are right on track."
2001 Highlights
- Named to FORTUNE 100 Best Places to Work for third consecutive year
- Increased R&D investment by 9 percent and added 217 new engineers to sales, marketing, and R&D
- Released major product innovations such as FieldPoint 2000, LabVIEW Real-Time 6i, TestStand 2.0, and Measurement Studio 6.0
- Strengthened business model with award-winning ni.com
- Held operating expenses flat with 2000 and delivered 13 percent operating margin
- Delivered record cash flow from operations of $57 million
For the year, net income was $36.4 million as compared to $55.2 million for 2000; diluted EPS for 2001 was $0.68 compared to $1.03 in 2000. For the year, revenue was down 6 percent in U.S. dollar terms, totaling $385 million compared to $410 million in 2000. In local currency terms, revenue was down 2 percent.
While the company still has a relatively difficult compare in the first quarter of 2002, the compares will ease significantly in the second and third quarters. Through Jan. 22, NI's daily order rate for the first quarter was down 12 percent compared to this time last year. If the order rate remains consistent for the rest of the quarter, revenue in Q1 2002 would be flat sequentially. This would be consistent with our pattern where for the four years prior to 2001, revenue in Q1 was within 1 percent of the previous Q4. The actual order rate for the remainder of Q1 2002 will be impacted by the performance of the overall economy.
NI estimates that Q1 expenses will be approximately $61 million, flat with Q1 2001.
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 2,800 employees and direct sales offices in more than 35 countries. NI
is increasing the productivity of engineers and scientists worldwide by delivering easy-to-integrate software and modular hardware. For the past three 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 Wednesday, Jan. 23, 2002 at 4 p.m. CST, interested parties may listen to a live broadcast of NI's quarterly conference call by visiting ni.com/call. A replay will then be available Wednesday, Jan. 23, 2002 at 7 p.m. CST through Thursday, Jan. 31, 2002 at 12 a.m. CST. The replay can be accessed by visiting the company's Web site at ni.com/call or by calling (719) 457-0820; confirmation code #518763.
This release contains "forward-looking statements," including predictions of future financial performance, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks could include expenses exceeding the company's budget targets, continued recession in the global economy, and foreign exchange fluctuations. The company directs you to documents filed with the SEC, including its recent Form 10-Q, for risks associated with the company's future performance.
The condensed consolidated statement of income, balance, and cash flow sheets to follow.
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
|
|
December 31,
2001
(unaudited)
|
December 31,
2000
|
|
ASSETS
|
|
Current assets:
|
|
|
Cash and cash equivalents
|
$ 49,089
|
$ 75,277
|
|
Short-term investments
|
101,422
|
79,525
|
|
Accounts receivable, net
|
53,624
|
74,704
|
|
Inventories
|
32,607
|
33,292
|
|
Other current assets
|
27,016
|
21,761
|
|
Total current assets
|
263,758
|
284,559
|
|
|
|
Property and equipment, net
|
137,360
|
84,694
|
|
Intangibles and other assets
|
23,501
|
20,097
|
|
Total assets
|
$424,619
|
$389,350
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
Accounts payable
|
28,958
|
30,365
|
|
Accrued expenses
|
24,964
|
33,986
|
|
Total current liabilities
|
53,922
|
64,351
|
|
|
|
Deferred income taxes
|
4,533
|
3,976
|
|
Total liabilities
|
58,455
|
68,327
|
|
|
|
Stockholders' equity:
|
|
Common stock
|
512
|
506
|
|
Additional paid-in capital
|
78,261
|
69,534
|
|
Retained earnings
|
290,408
|
254,006
|
|
Accumulated other comprehensive loss
|
(3,017)
|
(3,023)
|
|
Total stockholders' equity
|
366,164
|
321,023
|
|
Total liabilities and stockholders' equity
|
$424,619
|
$389,350
|
National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
|
|
Three Months
Ended December 31,
(unaudited)
|
Year
Ended December 31,
(unaudited)
|
|
|
2001
|
2000
|
2001
|
2000
|
|
Net sales
|
$94,426
|
$114,247
|
$385,275
|
$410,149
|
|
Cost of sales
|
25,508
|
27,640
|
101,297
|
98,326
|
|
Gross profit
|
68,918
|
86,607
|
283,978
|
311,823
|
|
|
|
Operating expenses:
|
|
Sales and marketing
|
36,388
|
40,871
|
145,555
|
147,377
|
|
Research and development
|
14,795
|
15,165
|
60,745
|
55,954
|
|
General and administrative
|
7,775
|
10,788
|
29,234
|
32,077
|
|
Total operating expenses
|
58,958
|
66,824
|
235,534
|
235,408
|
|
|
|
Operating income
|
9,960
|
19,783
|
48,444
|
76,415
|
|
Interest income, net
|
1,170
|
1,789
|
5,811
|
5,857
|
|
Net foreign exchange gain (loss)
|
(503)
|
275
|
(1,424)
|
(1,482)
|
|
Other income
|
168
|
12
|
702
|
323
|
|
|
|
Income before income taxes
|
10,795
|
21,859
|
53,533
|
81,113
|
|
Provision for income taxes
|
3,455
|
6,995
|
17,131
|
25,956
|
|
|
|
Net income
|
$7,340
|
$14,864
|
$36,402
|
$55,157
|
|
|
|
Earnings per share:
|
|
Basic
|
$0.14
|
$0.29
|
$0.72
|
$1.10
|
|
Diluted
|
$0.14
|
$0.28
|
$0.68
|
$1.03
|
|
Weighted average shares outstanding:
|
|
Basic
|
51,095
|
50,567
|
50,910
|
50,332
|
|
|
|
Diluted
|
53,524
|
53,642
|
53,651
|
53,564
|
National Instruments
Consolidated Statements of Cash Flows
(in thousands)
|
|
Year Ended
December 31,
(unaudited)
|
|
|
2001
|
2000
|
|
Cash flow from operating activities:
|
|
Net income
|
$36,402
|
$55,157
|
Adjustments to reconcile net income to
cash provided by operating activities:
|
|
Charges to income not requiring cash outlays:
|
|
Depreciation and amortization
|
16,802
|
16,345
|
|
Provision for (benefit from) deferred income taxes
|
2,186
|
(832)
|
|
Changes in operating assets and liabilities:
|
|
Decrease (increase) in accounts receivable
|
21,080
|
(16,425)
|
|
Decrease (increase) in inventory
|
685
|
(7,131)
|
|
Increase in prepaid expense and other assets
|
(9,574)
|
(1,655)
|
|
(Decrease) increase in current liabilities
|
(10,428)
|
9,537
|
|
Net cash provided by operating activities
|
57,153
|
54,996
|
|
|
|
Cash flow from investing activities:
|
|
Capital expenditures
|
(65,274)
|
(27,631)
|
|
Additions to intangibles
|
(4,903)
|
(6,930)
|
|
Purchases of short-term investments
|
(149,505)
|
(97,685)
|
|
Sales of short-term investments
|
127,608
|
101,685
|
|
Net cash used in investing activities
|
(92,074)
|
(30,561)
|
|
|
|
Cash flow from financing activities
|
|
Repayments of long-term debt
|
--
|
(5,177)
|
Proceeds from issuance of common stock,
net of repurchases
|
8,733
|
10,710
|
|
Net cash provided by financing activities
|
8,733
|
5,533
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
(26,188)
|
29,968
|
|
Cash and cash equivalents at beginning of period
|
75,277
|
45,309
|
|
Cash and cash equivalents at end of period
|
$ 49,089
|
$ 75,277
|
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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