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National Instruments Announces Record Fourth Quarter and Record Fiscal Year 1997 Revenues, Earnings


Net Income for Q4 Up 20 Percent Over Prior Year

Austin, Texas -- Jan. 29, 1998 -- National Instruments (Nasdaq: NATI) today announced record revenues for the fourth quarter of fiscal year 1997 of $65.6 million. For the year ended December 31, 1997, the Company had record revenues of $241 million. National Instruments ends the year by marking its fourteenth consecutive year of at least 20 percent or greater revenue growth.

"Our pattern of consistent growth was due in large part to our diverse products and a customer base that spans many different market segments and geographic regions," explained Dr. James Truchard, National Instruments President and CEO. "Our investment in research and development has helped drive our best U.S. growth in three years."

Revenues for the fourth quarter were $65.6 million, up 21 percent from $54.4 million in the fourth quarter of 1996, and up 8 percent from the $60.6 million reported in the third quarter of 1997. The breakdown of year over year revenue growth for the quarter was as follows: North America, 25 percent revenue growth; Europe, 18 percent revenue growth (31 percent in local currencies); and Asia/Pacific, 9 percent revenue growth (25 percent in local currencies).

Net income in the quarter was $9.9 million, up 20 percent from $8.2 million a year ago, and up 30 percent from the $7.6 million reported in the immediately prior quarter.

National Instruments reported diluted earnings per share of $0.29 on 34 million weighted average shares outstanding, compared with diluted earnings per share of $0.25 on 33.3 million weighted average shares outstanding in the fourth quarter of 1996, and $0.23 on 33.7 million weighted average shares outstanding in the third quarter of 1997. The Company reported basic earnings per share of $0.30 for the fourth quarter of 1997 compared to basic earnings per share of $0.25 in the fourth quarter of 1996. The Company's fourth quarter earnings were negatively impacted by $1.2 million in foreign currency exchange losses primarily related to the devaluation of Asian currencies.

"National Instruments, like many companies with business in Asia, is challenged by the consequences of currency turmoil. However, in 1998 we have taken additional steps to manage foreign exchange risk by expanding the foreign currency hedging program to hedge anticipated sales in some of our most significant markets," stated Alex Davern, National Instruments CFO and Treasurer.

For the year ended December 31, 1997, revenues were $241 million, compared with $201 million in 1996, a 20 percent increase. For the year ended December 31, 1997, income from operations was $50 million, compared with $37 million in 1996, a 33 percent increase. Results for the year ended December 31, 1997 included net income of $34 million or $1.00 per share (diluted) on 34 million weighted average shares outstanding, compared with $25 million and $0.77 per share (diluted) on 33 million weighted average shares outstanding for 1996.

Basic earnings per share was $1.03 per share for 1997 compared to $0.79 per share in 1996.

Net income increased 32 percent from the year ended December 31, 1996.

National Instruments, a leading supplier of computer-based measurement and automation products, was founded in 1976. The company manufactures hundreds of software and hardware products which, combined with industry-standard computers, are used to replace and/or communicate with traditional instrumentation to acquire, analyze, and display data and to monitor and control processes. These computer-based instrumentation systems 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) 349-5090 or by sending e-mail to nati@ni.com.

For More Information
For more information, contact:

National Instruments
6504 Bridge Point Parkway
Austin, Texas 78730-5039

tel (512) 794-0100, toll free in the U.S. and Canada (800) 258-7022, fax (512) 794-8411, e-mail info@ni.com. General company and financial information is available on the company's web site at /

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

Product and company names listed are trademarks or tradenames of their respective companies.

More information on National Instruments trademarks



National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

December 31,
1997
December 31,
1996
ASSETS
Current assets:
Cash and cash equivalents $ 31,943 $ 30,211
Marketable securities 51,067 48,956
Accounts receivable, net 37,411 33,442
Inventories 15,505 11,778
Other current assets 13,287 7,198
Total current assets 149,213 131,585
Property and equipment, net 46,805 32,184
Intangibles and other assets 8,472 5,456
Total assets $204,490 $169,225
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 851 $ 1,517
Accounts payable 16,946 11,430
Accrued expenses 19,274 19,344
Total current liabilities 37,071 32,291
Long-term debt 5,151 9,175
Deferred income taxes 514 806
Total liabilities 42,736 42,272
Stockholder's equity:
Common stock 326 325
Additional paid-in capital 47,160 44,287
Retained earnings 116,215 82,590
Other (1,947) (249)
Total stockholders' equity 161,754 126,953
Total liabilities and stockholders' equity $204,490 $169,225

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

Three Months
Ended December 31,
(unaudited)
Years
Ended December 31,
1997 1996 1997 1996
Net sales $65,621 $54,387 $240,879 $200,715
Cost of sales 14,580 13,104 55,096 49,755
Gross profit 51,041 41,283 185,783 150,960
Operating expenses
Sales and marketing 23,836 18,959 87,096 72,067
Research and development 6,989 6,148 30,296 24,387
General and administrative 5,020 4,166 18,508 17,129
Total operating expenses 35,845 29,273 135,900 113,583
Operating income 15,196 12,010 49,883 37,377
Interest income, net 791 491 2,953 1,561
Foreign exchange loss, net (1,245) (203) (2,649) (899)
Income before income taxes 14,742 12,298 50,187 38,039
Provision for income taxes 4,865 4,058 16,562 12,553
Net income $9,877 $8,240 $ 33,625 $25,486
Basic earnings per share $ 0.30 $0.25 $ 1.03 $0.79
Diluted earnings per share $ 0.29 $0.25 $ 1.00 $0.77
Weighted average shares
outstanding -- basic
32,651 32,462 32,563 32,359
Weighted average shares
outstanding -- diluted
34,003 33,301 33,656 32,943

Contact:
Investor Relations
National Instruments
(512) 683-5090

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