National Instruments Reports Solid Profitability, Record Cash Flow in Q3Company Delivers Strong Performance in Tough Economy
AUSTIN, Texas -- Oct. 25, 2001 -- National Instruments (NASDAQ: NATI) today announced revenue of $85 million for Q3 2001 and fully diluted EPS of 11 cents. Cash flow from operations was a quarterly record of $25 million.
"During Q3 NI delivered a strong performance in an extremely tough environment. Compared to the performance of traditional test instrument vendors, we believe we have gained market share more rapidly this year than at any time in the past 10 years," said James Truchard, NI President and CEO. "We continue to invest aggressively in strategic new platforms that offer a compelling cost and performance advantage."
Highlights from the third quarter include:
- Solid profitability with fully diluted EPS of 11 cents
- Record cash flow from operations of $25 million
- Record sales of PXI
- Successful NIWeek user conference with more than 1,300 attendees from 50 countries
- Significant new products: Real-time PXI and FieldPoint controllers and Measurement Studio 6.0
- Ray Almgren named Vice President of Product Strategy, strengthening management team
NI's computer-based measurement and automation products declined by 4 percent in local currency and 8 percent in U.S. dollars, compared to the greater than 50 percent decline in orders seen by the test instrument industry in Q3. Sales of the company's instrument control products, which are used to control traditional instruments and currently represent 20 percent of the company's revenue, were down 40 percent in Q3.
Geographically, the Q3 2001 breakdown of revenue growth in U.S. dollars as compared to Q3 2000 was as follows: Americas, down 21 percent; Europe, down 13 percent; and Asia, down 8 percent. In local currency terms, revenue was up 1 percent in Europe, down 5 percent in Asia, and down 13 percent worldwide.
"In Q3 we did an outstanding job controlling costs in all departments, reducing our operating expenses by 7 percent from Q3 last year," said Alex Davern, CFO of NI. "Reflecting on the past nine months, 2001 has proven to be one of the toughest years on record with U.S. industrial production suffering its longest string of declines since 1944-1945. Given the economy, we feel NI has executed well so far this year by gaining market share, managing expenses, delivering 15 percent pre-tax margin, and generating $55 million in cash flow from operations. We also maintained our long-term investments, especially in R&D and sales, adding approximately 175 engineers in the past 12 months."
NI estimates fourth quarter expenses will be approximately $58 million, down 12 percent from Q4 2000. As of Oct. 24, 2001, NI's Q4 daily order rate was down 21 percent compared to the same period last year.
No single industry accounts for more than 10 percent of NI's total revenue, and with the exception of the U.S. government, no single customer accounts for more than 1 percent of NI total revenue.
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 2,700 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 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.
Interested parties can listen to a conference call today, Oct. 25, 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 633924, from Oct. 25 at 7 p.m. CDT through Nov. 1.
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 product introduction success, 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, balance sheets, and cash flows to follow.
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
|
|
September 30,
2001
(unaudited)
|
December 31,
2000
|
|
ASSETS
|
|
Current assets:
|
|
|
Cash and cash equivalents
|
$ 74,787
|
$ 75,277
|
|
Short-term investments
|
88,460
|
79,525
|
|
Accounts receivable, net
|
53,348
|
74,704
|
|
Inventories
|
34,994
|
33,292
|
|
Other current assets
|
27,948
|
21,761
|
|
Total current assets
|
279,537
|
284,559
|
|
|
|
Property and equipment, net
|
120,358
|
84,694
|
|
Intangibles and other assets
|
23,443
|
20,097
|
|
Total assets
|
$423,338
|
$389,350
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
Accounts payable
|
33,992
|
30,365
|
|
Accrued expenses
|
31,866
|
33,986
|
|
Total current liabilities
|
65,858
|
64,351
|
|
|
|
Deferred income taxes
|
3,899
|
3,976
|
|
Total liabilities
|
69,757
|
68,327
|
|
|
|
Stockholders' equity:
|
|
Common stock
|
509
|
506
|
|
Additional paid-in capital
|
72,331
|
69,534
|
|
Retained earnings
|
283,068
|
254,006
|
|
Accumulated other comprehensive loss
|
(2,327)
|
(3,023)
|
|
Total stockholders' equity
|
353,581
|
321,023
|
|
Total liabilities and stockholders' equity
|
$423,338
|
$389,350
|
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)
|
|
|
2001
|
2000
|
2001
|
2000
|
|
Net sales
|
$85,062
|
$102,247
|
$290,849
|
$295,902
|
|
Cost of sales
|
23,288
|
24,417
|
75,789
|
70,687
|
|
Gross profit
|
61,774
|
77,830
|
215,060
|
225,215
|
|
|
|
Operating expenses:
|
|
Sales and marketing
|
34,275
|
37,302
|
109,167
|
106,506
|
|
Research and development
|
14,920
|
14,690
|
45,950
|
40,788
|
|
General and administrative
|
6,070
|
7,434
|
21,459
|
21,289
|
|
Total operating expenses
|
55,265
|
59,426
|
176,576
|
168,583
|
|
|
|
Operating income
|
6,509
|
18,404
|
38,484
|
56,632
|
|
Interest income, net
|
1,303
|
1,543
|
4,574
|
4,068
|
|
Net foreign exchange gain (loss)
|
341
|
(630)
|
(921)
|
(1,756)
|
|
Other income
|
206
|
90
|
601
|
310
|
|
|
|
Income before income taxes
|
8,359
|
19,407
|
42,738
|
59,254
|
|
Provision for income taxes
|
2,674
|
6,210
|
13,676
|
18,961
|
|
|
|
Net income
|
$5,685
|
$13,197
|
$29,062
|
$40,293
|
|
|
|
Basic earnings per share
|
$0.11
|
$0.26
|
$0.57
|
$0.80
|
|
Diluted earnings per share
|
$0.11
|
$0.25
|
$0.54
|
$0.75
|
Weighted average shares
outstanding -- basic
|
50,956
|
50,364
|
50,848
|
50,247
|
|
|
Weighted average shares
outstanding -- diluted
|
53,288
|
53,612
|
53,682
|
53,531
|
National Instruments
Consolidated Statements of Cash Flows
(in thousands)
|
|
Three Months
Ended September 30,
(unaudited)
|
Nine Months
Ended September 30,
(unaudited)
|
|
|
2001
|
2000
|
2001
|
2000
|
|
Cash flow from operating activities:
|
|
Net income
|
$5,685
|
$13,198
|
$29,062
|
$40,293
|
Adjustments to reconcile net income to
cash provided by operating activities:
|
|
Charges to income not requiring cash outlays:
|
|
Depreciation and amortization
|
3,680
|
4,041
|
12,393
|
12,064
|
|
Provision for (benefit from) deferred income taxes
|
(1,226)
|
710
|
1,067
|
1,999
|
|
Changes in operating assets and liabilities:
|
|
Decrease (increase) in accounts receivable
|
7,560
|
(1,836)
|
21,356
|
(6,837)
|
|
(Increase) decrease in inventory
|
79
|
(4,135)
|
(1,702)
|
(5,460)
|
|
Increase in prepaid expense and other assets
|
(1,728)
|
(5,722)
|
(8,971)
|
(8,186)
|
|
Increase in current liabilities
|
11,389
|
8,967
|
1,507
|
5,474
|
|
Net cash provided by operating activities
|
25,439
|
15,223
|
54,712
|
39,347
|
|
|
|
Cash flow from investing activities:
|
|
Capital expenditures
|
(20,371)
|
(4,198)
|
(45,149)
|
(16,643)
|
|
Additions to intangibles
|
(1,489)
|
(1,426)
|
(3,918)
|
(5,073)
|
|
Purchases of short-term investments
|
(37,373)
|
(43,144)
|
(110,790)
|
(68,679)
|
|
Sales of short-term investments
|
38,991
|
35,051
|
101,855
|
63,747
|
|
Net cash used in investing activities
|
(20,242)
|
(13,717)
|
(58,002)
|
(26,648)
|
|
|
|
Cash flow from financing activities
|
|
Repayments of long-term debt
|
--
|
(143)
|
--
|
(783)
|
Proceeds from issuance of common stock,
net of repurchases
|
(96)
|
944
|
2,800
|
5,208
|
|
Net cash provided by financing activities
|
(96)
|
801
|
2,800
|
4,425
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
5,101
|
2,307
|
(490)
|
17,124
|
|
Cash and cash equivalents at beginning of period
|
69,686
|
60,126
|
75,277
|
45,309
|
|
Cash and cash equivalents at end of period
|
$ 74,787
|
$ 62,433
|
$ 74,787
|
$ 62,433
|
Contact:
Kimberly Allen
Investor Relations Manager
National Instruments
(512) 683-6873 |
Kathleen Fisher
Business Communications Manager
National Instruments
(512) 683-5731 |
###
Related Links:
|
