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National Instruments Reports 10th Consecutive Quarter of Record Revenue


Revenue Up 24%, Net Income Up 33%

AUSTIN, Texas -- Oct. 19, 2000 -- National Instruments (NASDAQ:NATI), a leading provider of measurement and automation solutions, today announced record revenue for the third quarter of 2000, as revenue grew by 24 percent and net income climbed 33 percent.

"Record revenue of $102.2 million for the third quarter was fueled primarily by increased demand for our newer products and system solutions based on our PXI platform," said James Truchard, NI President and CEO. "With the launch midquarter of LabVIEW 6i, we were pleased to see our LabVIEW customers upgrade at record levels. This reinforces our vision that Internet technologies will play a leading role in next-generation solutions for measurement and automation."

Quarterly Highlights

  • Third-quarter revenue of $102.2 million marks 10th consecutive quarter of record revenue
  • Revenue from LabVIEW 6i upgrades and development systems for Microsoft Windows set monthly record in September
  • Increased ongoing investment in R&D by 34 percent, excluding acquisition charges
  • Newer product lines, such as PXI, Motion, Vision, and TestStand, have driven growth of the Company

"Thanks to our excellent execution in Q3 2000, we delivered our 10th consecutive quarter of record revenue," said Alex Davern, CFO of NI. "Despite the $1.2 million reduction in gross margins as a result of tight component supply and the $0.6 million loss on foreign exchange, we still delivered 33 percent net income growth."

With the success of LabVIEW 6i and other new NI products, revenue for the third quarter was $102.2 million, up 24 percent from $82.7 million in the third quarter of 1999. Geographically, the breakdown of revenue growth in USD for the quarter as compared to the third quarter of 1999 was as follows: Americas, 22 percent revenue growth; Europe, 20 percent revenue growth; and Asia/Pacific, 40 percent revenue growth.

Net income for the quarter increased by 33 percent to $13.2 million compared to net income of $9.9 million in the third quarter of 1999. NI reported basic earnings per share of $0.26 for the third quarter of 2000 compared to basic earnings per share of $0.20 in the third quarter of 1999. The Company reported diluted earnings per share of $0.25 on 53.6 million weighted average shares outstanding for the third quarter of 2000 compared to diluted earnings per share of $0.19 for the same period last year.

About National Instruments
NI (NASDAQ: NATI) leverages commercial technologies, such as industry-standard computers and the Internet, to deliver customer-defined measurement and automation solutions. With more than 2,400 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 modular software and hardware. In fiscal year 1999, NI recorded its 23rd consecutive year of double-digit growth with net revenue totaling $330 million.

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, Oct. 19, 2000 at 7 p.m. CDT through Thursday, Oct. 26, 2000 at 12 a.m. CDT, 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 #447206.

This release may contain "forward-looking statements" including statements regarding the role of Internet technologies in next-generation solutions for measurement and automation, which are subject to a number of risks and uncertainties, including delays in shipment of products, 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)

September 30,
2000
(unaudited) 		December 31,
1999
ASSETS
Current assets:
Cash and cash equivalents $ 62,433 $ 45,309
Short-term investments 88,457 83,525
Accounts receivable, net 65,116 58,279
Inventories 31,621 26,161
Other current assets 21,538 17,755
Total current assets 269,165 231,029
Property and equipment, net 77,668 69,771
Intangibles and other assets 20,473 17,953
Total assets $367,306 $318,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 891 $ 876
Accounts payable 26,192 23,318
Accrued expenses 32,712 33,074
Total current liabilities 59,795 57,268
Long-term debt 3,545 4,301
Deferred income taxes 2,955 2,949
Total liabilities 66,295 64,518
Stockholders' equity:
Common stock 504 500
Additional paid-in capital 64,034 58,830
Retained earnings 239,142 198,849
Accumulated other comprehensive loss (2,669) (3,944)
Total stockholders' equity 301,011 254,235
Total liabilities and stockholders' equity $367,306 $318,753

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

Three Months
Ended September 30,
(unaudited) 		Nine Months
Ended September 30,
(unaudited)
2000 1999 2000 1999
Net sales $102,247 $82,724 $295,902 $236,186
Cost of sales 24,417 19,548 70,687 54,607
Gross profit 77,830 63,176 225,215 181,579
Operating expenses:
Sales and marketing 37,302 30,982 106,506 86,679
Research and development 14,690 13,133 40,788 33,597
General and administrative 7,434 6,220 21,289 17,413
Total operating expenses 59,426 50,335 168,583 137,689
Operating income 18,404 12,841 56,632 43,890
Interest income, net 1,543 1,161 4,068 2,917
Net foreign exchange gain (loss)
 and other 		(539) 625 (1,446) (97)
Income before income taxes and
 cumulative effect of accounting
 change 		19,408 14,627 59,254 46,710
Provision for income taxes 6,210 4,681 18,961 14,947
Income before cumulative effect
 of accounting change 		13,198 9,946 40,293 31,763
Cumulative effect of accounting
 change 		     -      -       - (552)
Net income $13,198 $9,946 $40,293 $31,211
Basic earnings per share $0.26 $0.20 $0.80 $0.63
Weighted average shares
 outstanding -- basic 		50,364 49,855 50,247 49,690
Diluted earnings per share $0.25 $0.19 $0.75 $0.60
Weighted average shares
 outstanding -- diluted 		53,612 52,570 53,531 51,950

Contact:

Tara Mason
Investor Relations Manager
National Instruments
(512) 683-6873		 Alex Davern
Chief Financial Officer
National Instruments
(512) 683-6977


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