National Instruments Reports Revenue of $98M for Second Quarter 2001

AUSTIN, Texas -- July 19, 2001 -- National Instruments (NASDAQ: NATI) today announced revenue of $98M for Q2 2001, down 2 percent from Q2 2000 and resulting in fully diluted EPS of $0.18. Orders in Q2 2001 were flat with the same quarter last year. Results are in line with preliminary figures released July 2, 2001.

"Despite the unusually severe downturn in the industrial economy, we delivered strong profitability, which allowed us to continue our aggressive investment in R&D and field sales," said James Truchard, NI President and CEO. "We are excited about our current R&D initiatives to expand our opportunities into new application areas next year and beyond."

Geographically, the Q2 2001 breakdown of revenue growth in U.S. dollars as compared to Q2 2000 was as follows: Americas, down 6 percent; Europe flat; and Asia, up 11 percent. In local currency terms, revenue was up 11 percent in Europe, up 15 percent in Asia, and up 2 percent worldwide. On the expense side, NI has reduced its expense growth rate from 24 percent last year, to 14 percent in Q1 2001, and to 8 percent in Q2 2001.

"Compared to the severe declines seen by many of the traditional players in our industry, we had a solid quarter," said Alex Davern, CFO of NI. "We gained market share with the continued growth of our measurement products and managed our expenses effectively, achieving net margins of 10 percent of revenue."

In response to the broad economic slowdown, NI revised its budget in May for the remainder of 2001. The revised budget plans for year-over-year revenue to be down 2 percent in Q3 and flat in Q4. Year-over-year expense growth is budgeted at approximately 6 percent in Q3 and flat in Q4. The revised budget anticipates that the company's operating margin will be in the low double digits in Q3, returning toward the company's long-term corporate model of 18 percent by Q4. This budget represents the company's best point estimate within a likely range. Should the global economy deteriorate further, revenue and operating margins may fall below this level. Should it begin to recover, they may exceed this level.

Interested parties can listen to a conference call today, July 19, 2001, beginning at 4 p.m. CDT on ni.com/call. Replay information will be available on the Web or by calling (719) 457-0820, confirmation code #540620, from July 19 at 7 p.m. CDT through July 25.

NI will discuss its long-term strategies in detail at NIWeek 2001, the company's annual customer and technology conference held from August 15 to August 17 in Austin, Texas. NIWeek is a key event for launching new products and discussing future directions of the company. NI management also will provide a midquarter update on Q3 2001 performance at this year's NIWeek conference.

About National Instruments
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 2,700 employees and direct sales offices in more than 35 countries. NI increases 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. For more information, visit NI on the Web at ni.com.

NI investment information may be obtained from the company's Investor Relations Department on the Web at ni.com/nati, by sending e-mail to nati@ni.com, or by calling (512) 683-5090.

This release contains "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934, which are intended to be covered by the safe harbors created therein and the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained within this release, including the predictions of future financial performance, are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including further deterioration in the global economy, delays in release of new products, foreign exchange fluctuations, and actual expenses in excess of the company's budget targets. The company directs you to documents filed with the SEC, including its recent Form 10Q, for risks associated with the company's future performance.

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

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