National Instruments Reports Solid Profitability; Strong Cash Flow in Q2 2002NI Expects Return to Year-Over-Year Revenue Growth in Q3
AUSTIN, Texas -- July 17, 2002 -- National Instruments (Nasdaq: NATI) today announced revenue of $94 million for the second quarter of 2002 with diluted earnings per share (EPS) of 14 cents. NI also reported net income of $7.4 million and cash flow from operations of $17 million for Q2 2002.
"We turned in a solid performance in Q2 2002 in the face of a tough economic environment," said James Truchard, NI President and CEO. "Though the climate remains challenging, we were encouraged with the dramatic difference between our performance and that of our industry peers. We were especially pleased with continued record orders for LabVIEW Real-Time software and our PXI modular hardware and with our progress in penetrating new customer applications in product design and high-volume manufacturing."
Q2 2002 Highlights
- Solid profitability with diluted EPS of 14 cents
- Strong cash flow, increasing net cash and short-term investment by $11 million to $160 million
- Expenses at $58 million, down 3 percent as compared to the second quarter of 2001
- Record orders of LabVIEW Real-Time software and modular PXI hardware
- New machine vision development software for LabVIEW Real-Time
"With net margins of 8 percent, we continued to deliver solid profitability and maintained one of the highest net margins in our industry," said Alex Davern, CFO of NI. "We were encouraged to see U.S. industrial production in June return to year-over-year growth for the first time in 16 months. This improvement, combined with our revenue run rate in Q2, leaves us well positioned to return to year-over-year revenue growth in the third quarter."
Geographically, the change of revenue in U.S. dollar terms for Q2 2002 as compared to Q2 2001 was as follows: Asia, up 8 percent; Americas, down 2 percent; Europe, down 12 percent; and down 4 percent worldwide.
Since NI's IPO in 1995, the company's typical seasonal pattern has been for revenue in Q3 to be flat with Q2. While it is difficult in the current environment to predict revenues to within a few million dollars, NI anticipates a return to year-over-year revenue growth in Q3 with gross margins of 73 percent. The company estimates expenses in Q3 2002 will be approximately $60 million, up from $58 million in Q2 2002.
This release contains "forward-looking statements," including statements about our competitive position, our expanding opportunities, our business returning to the previous seasonal pattern, and predictions of future revenue, gross margins, and expenses. These 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, foreign exchange fluctuations, unexpected changes in seasonal revenue patterns, and delays in the release of new products. The company directs you to documents filed with the SEC, including its recent Form 10-K, for risks associated with the company's future performance.
Beginning July 17, 2002 at 4 p.m. CDT, 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 July 17, 2002 at 7 p.m. CDT through July 24, 2002 at 12 a.m. CDT. The replay can be accessed by visiting the company's Web site at ni.com/call or by calling (719) 457-0820; confirmation code #432711.
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 2,900 employees and direct sales offices in 37 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.
The condensed consolidated balance sheets, statements of income, and cash flows to follow.
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
|
|
June 30,
2002
(unaudited)
|
December 31,
2001
|
|
ASSETS
|
|
Current assets:
|
|
|
Cash and cash equivalents
|
$ 60,580
|
$ 49,089
|
|
Short-term investments
|
99,034
|
101,422
|
|
Accounts receivable, net
|
59,660
|
53,624
|
|
Inventories, net
|
32,510
|
32,607
|
|
Other current assets
|
25,813
|
27,016
|
|
Total current assets
|
277,597
|
263,758
|
|
|
|
Property and equipment, net
|
145,145
|
137,360
|
|
Intangibles and other assets
|
24,442
|
23,501
|
|
Total assets
|
$447,184
|
$424,619
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
Accounts payable
|
24,385
|
28,958
|
|
Accrued expenses
|
34,561
|
24,964
|
|
Total current liabilities
|
58,946
|
53,922
|
|
|
|
Deferred income taxes
|
3,643
|
4,533
|
|
Total liabilities
|
62,589
|
58,455
|
|
|
|
Stockholders' equity:
|
|
Common stock
|
515
|
512
|
|
Additional paid-in capital
|
84,353
|
78,261
|
|
Retained earnings
|
305,164
|
290,408
|
|
Accumulated other comprehensive loss
|
(5,437)
|
(3,017)
|
|
Total stockholders' equity
|
384,595
|
366,164
|
|
Total liabilities and stockholders' equity
|
$447,184
|
$424,619
|
National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
|
|
Three Months
Ended June 30,
(unaudited)
|
Six Months
Ended June 30,
(unaudited)
|
|
|
2002
|
2001
|
2002
|
2001
|
|
Net sales
|
$93,505
|
$97,707
|
$188,244
|
$205,787
|
|
Cost of sales
|
26,603
|
25,628
|
51,961
|
52,501
|
|
Gross profit
|
66,902
|
72,079
|
136,283
|
153,286
|
|
|
|
Operating expenses:
|
|
Sales and marketing
|
33,566
|
36,389
|
68,974
|
74,892
|
|
Research and development
|
15,734
|
15,933
|
31,667
|
31,030
|
|
General and administrative
|
8,842
|
7,672
|
16,628
|
15,389
|
|
Total operating expenses
|
58,142
|
59,994
|
117,269
|
121,311
|
|
|
|
Operating income
|
8,760
|
12,085
|
19,014
|
31,975
|
|
Interest income, net
|
839
|
1,470
|
1,635
|
3,271
|
|
Net foreign exchange gain (loss)
|
217
|
116
|
(677)
|
(1,262)
|
|
Other income
|
445
|
197
|
522
|
395
|
|
|
|
Income before income taxes
|
10,261
|
13,868
|
20,494
|
34,379
|
|
Provision for income taxes
|
2,873
|
4,438
|
5,738
|
11,002
|
|
|
|
Net income
|
$7,388
|
$9,430
|
$14,756
|
$23,377
|
|
|
|
Basic earnings per share
|
$0.14
|
$0.19
|
$0.29
|
$0.46
|
|
Diluted earnings per share
|
$0.14
|
$0.18
|
$0.27
|
$0.43
|
Weighted average shares
outstanding -- basic
|
51,449
|
50,887
|
51,331
|
50,794
|
|
|
Weighted average shares
outstanding -- diluted
|
53,974
|
53,450
|
53,966
|
53,786
|
National Instruments
Consolidated Statements of Cash Flows
(in thousands)
|
|
Three Months Ended
June 30,
(unaudited)
|
|
|
2002
|
2001
|
|
Cash flow from operating activities:
|
|
Net income
|
$7,388
|
$9,430
|
Adjustments to reconcile net income to
cash provided by operating activities:
|
|
Charges to income not requiring cash outlays:
|
|
Depreciation and amortization
|
5,572
|
4,306
|
|
Benefit from deferred income taxes
|
(1,612)
|
(3)
|
|
Changes in operating assets and liabilities:
|
|
Decrease in accounts receivable
|
514
|
5,225
|
|
Increase in inventory
|
(1,703)
|
(278)
|
|
Decrease in prepaid expense and other assets
|
3,713
|
463
|
|
Increase (decrease) in current liabilities
|
3,171
|
(5,899)
|
|
Net cash provided by operating activities
|
17,043
|
13,244
|
|
|
|
Cash flow from investing activities:
|
|
Capital expenditures
|
(8,736)
|
(12,471)
|
|
Additions to intangibles
|
(2,270)
|
(1,266)
|
|
Purchases of short-term investments
|
(31,942)
|
(31,031)
|
|
Sales of short-term investments
|
41,132
|
23,131
|
|
Net cash used in investing activities
|
(1,816)
|
(21,637)
|
|
|
|
Cash flow from financing activities
|
Proceeds from issuance of common stock,
net of repurchases
|
4,853
|
1,518
|
|
Net cash provided by financing activities
|
4,853
|
1,518
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
20,080
|
(6,875)
|
|
Cash and cash equivalents at beginning of period
|
40,500
|
76,561
|
|
Cash and cash equivalents at end of period
|
$ 60,580
|
$ 69,686
|
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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