National Instruments Reports Record Revenue and Strong Earnings Growth
Quarterly Revenue of $142 Million -- Up 13 Percent Year-Over-Year
AUSTIN, Texas -- Oct. 26, 2005 -- National Instruments (NASDAQ: NATI) reported third quarter revenue of $142 million, an increase of 13 percent compared to the third quarter of 2004. This represents the highest quarterly revenue in the company's history, fueled by new product revenue and record revenue from strategic PXI and modular instruments platforms. GAAP fully diluted earnings per share (EPS) for Q3 were $0.18 with GAAP net income of $14.4 million, up 81 percent from Q3 2004.
The company also announced a quarterly dividend of $0.05 per share on its common stock payable on Nov. 28, 2005 to shareholders of record on Nov. 7, 2005. As of Sept. 30, 2005, the company had $181 million of cash and short-term investments.
"Our investment in R&D continued to help drive virtual instrumentation into higher performance measurement and industrial control applications," said Dr. James Truchard, NI president and CEO. "LabVIEW 8, a significant upgrade to our flagship software product, will further support our expansion in test, design and control, especially in large applications and distributed systems. Now LabVIEW users can design, distribute and synchronize intelligent systems in real time."
Q3 2005 Highlights
- Highest quarterly revenue in company's 29-year history
- Revenue of $142 million, up 13 percent year-over-year
- GAAP net income of $14.4 million, up 81 percent from Q3 2004
- New product revenue continues to fuel growth
- Record sales of PXI and modular instruments
- Record attendance at NIWeek 2005 with attendees from more than 40 countries
- Cash and short-term investments of $181 million
"We turned in a solid quarter with the highest quarterly revenue in the company's history," said Alex Davern, NI CFO. "For the rest of the year and into 2006 we will be focused on continuing to grow the top line while managing the growth in our expenses to continue to generate operating leverage."
Geographically, the growth of revenue in U.S. dollar terms for Q3 2005 compared to Q3 2004 was as follows: up 16 percent in the Americas, up 6 percent in Europe and up 15 percent in Asia, giving overall growth of 13 percent. In local currency terms, revenue was up 4 percent in Europe, up 8 percent in Asia and up 15 percent in the Americas, for an overall local currency growth of 10 percent.
Guidance for Q4 2005
NI expects record quarterly revenue in Q4 2005 of between $152 million and $157 million, representing 11 percent to 15 percent year-over-year revenue growth. The company expects to report fully diluted EPS of between $0.20 and $0.24. Interested parties can listen to a conference call today, Oct. 26, beginning at 4:00 p.m. Central time, at www.ni.com/call. Replay information will be available by calling (719) 457-0820 confirmation code #4407131, from Oct. 26 at 7:00 p.m. Central time, through Oct. 31 at midnight Central time.
This release contains "forward-looking statements," including statements regarding revenue from new products fueling growth, managing expenses, growing the top-line, continuing to generate operating leverage and our guidance for Q4 2005 with respect to revenue and earnings per share. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes in the global economy, delays in the release of new products, the ability to control expenses, fluctuations in customer demand for NI products, manufacturing inefficiencies, seasonality issues and foreign exchange fluctuations. Actual results may differ materially from the expected results. The company directs you to documents filed with the SEC for other risks associated with the company's future performance.
About National Instruments
National Instruments (www.ni.com) is a technology pioneer and leader in virtual instrumentation -- a revolutionary concept that has changed the way engineers and scientists in industry, government and academia approach measurement and automation. Leveraging PCs and commercial technologies, virtual instrumentation increases productivity and lowers costs for test, control and design applications through easy-to-integrate software, such as NI LabVIEW, and modular measurement and control hardware for PXI, PCI, USB and Ethernet. Headquartered in Austin, Texas, NI has more than 3,700 employees and direct operations in nearly 40 countries. In 2004, the company sold products to more than 25,000 companies in 90 countries. For the past six years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati.
The condensed consolidated balance sheet and statement of income follow.
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
|
|
September 30,
2005
|
December 31,
2004
|
|
ASSETS
|
|
Current assets:
|
|
|
Cash and cash equivalents
|
$ 47,607
|
$ 76,216
|
|
Short-term investments
|
133,083
|
150,392
|
|
Accounts receivable, net
|
84,730
|
87,312
|
|
Inventories, net
|
54,868
|
54,043
|
|
Other current assets
|
27,065
|
24,341
|
|
Total current assets
|
347,353
|
392,304
|
|
|
|
Property and equipment, net
|
146,479
|
149,783
|
|
Intangibles, net and other assets
|
88,364
|
40,328
|
|
Total assets
|
$582,196
|
$582,415
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
Accounts payable
|
$28,065
|
$25,208
|
|
Accrued expenses and other liabilities
|
56,648
|
57,461
|
|
Total current liabilities
|
84,713
|
82,669
|
|
|
|
Deferred income taxes
|
13,297
|
13,297
|
|
Total liabilities
|
98,010
|
95,966
|
|
|
|
Stockholders' equity:
|
|
Preferred stock
|
-
|
-
|
|
Common stock
|
782
|
789
|
|
Additional paid-in capital
|
71,414
|
98,897
|
|
Retained earnings
|
412,859
|
384,118
|
|
Other
|
(869)
|
2,645
|
|
Total stockholders' equity
|
484,186
|
486,449
|
|
Total liabilities and stockholders' equity
|
$582,196
|
$582,415
|
National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
|
|
Three Months
Ended September 30,
|
Nine Months
Ended September 30,
|
|
|
2005
|
2004
|
2005
|
2004
|
|
Net sales
|
$141,618
|
$125,348
|
$412,180
|
$377,113
|
|
Cost of sales
|
37,893
|
34,247
|
106,970
|
99,142
|
|
Gross profit
|
103,725
|
91,101
|
305,210
|
277,971
|
|
|
|
|
|
Sales and marketing
|
53,053
|
46,378
|
156,953
|
140,123
|
|
Research and development
|
20,782
|
21,737
|
63,472
|
63,072
|
|
General and administrative
|
11,422
|
10,358
|
34,542
|
30,202
|
|
Patent litigation
|
125
|
2,591
|
(1,375)
|
3,184
|
|
Total operating expenses
|
85,382
|
81,064
|
253,592
|
236,581
|
|
|
|
Operating income
|
18,343
|
10,037
|
51,618
|
41,390
|
|
Interest income, net
|
903
|
613
|
2,741
|
2,043
|
|
Foreign exchange gain/(loss), net
|
(404)
|
(85)
|
(1,170)
|
(831)
|
|
Other income, net
|
105
|
17
|
180
|
230
|
|
|
|
Income before income taxes
|
18,947
|
10,582
|
53,369
|
42,832
|
|
Provision for income taxes
|
4,548
|
2,645
|
12,810
|
10,708
|
|
|
|
Net income
|
$14,399
|
$7,937
|
$40,559
|
$32,124
|
|
|
|
Earnings per share:
|
|
Basic
|
$0.18
|
$0.10
|
$0.52
|
$0.41
|
|
Diluted
|
$0.18
|
$0.10
|
$0.50
|
$0.39
|
|
Weighted average shares
|
|
Outstanding:
|
|
Basic
|
78,158
|
78,671
|
78,567
|
78,637
|
|
|
|
Diluted
|
80,575
|
81,749
|
80,939
|
82,209
|
|
Dividend declared per share
|
$0.05
|
$0.05
|
$0.15
|
$0.13
|
Contact:
Rebecca Geier
Corp. Comm./Investor Relations Director
National Instruments
(512) 683-5325
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